"People are holding back": Retailers struggle - War and inflation spoil hoped-for recovery

Created: 05/08/2022Updated: 05/08/2022 11:18 am

Shopping in Munich: customer frequency in shops is currently around 20 to 25 percent below the pre-corona values ​​(archive image) © Sven Hoppe/dpa

After the difficult Corona times, the Bavarian retail trade needed strong spring business.

But war and inflation spoil the buying mood of the customers.

Munich – A good month after the end of the mask requirement in Bavarian retail, the Ukraine war, inflation and delivery problems are spoiling the much-needed upswing.

"We had hoped that falling corona numbers and rising temperatures would put people in a good mood to buy," said the managing director of the Bavarian trade association, Bernd Ohlmann, to the German press agency.

But that is now being slowed down: "People are holding back, not only with larger purchases."

This is particularly noticeable in the stationary sector beyond the food retail trade, said Ohlmann.

The number of customers in the shops would be around 20 to 25 percent below the pre-corona values, the sales around 20 to 30 percent.

"Many people are afraid of the future and there is hardly any positive news," said Ohlmann.

Customers were more likely to keep their money together.

Retail problems: inflation, supply problems, Ukraine war

At the same time, the prices demanded by the suppliers are rising, as are the energy costs of trading itself and, to top it all off, there are also delivery problems.

"The customer wants to buy something and you have to tell him, 'I'm sorry.'" And often the retailer can't even say when he'll get the product back.

The wave of bankruptcies feared at the beginning of the Corona crisis has not yet materialized, said Ohlmann.

"And we are in good spirits that it won't happen that way either." Above all, government aid and short-time work benefits would have prevented them.

In addition, many retailers also used alternative sales channels such as delivery services or online trading.

"Necessity is the mother of invention," he emphasized.

Nevertheless, many shops that sell clothes or shoes that are important for the city centers are “standing with one foot on the precipice”.

Retail hit by Corona - Online trade continues to develop positively

Online trade, on the other hand, continues to develop positively, even if it is no longer booming as strongly as at the beginning of the Corona crisis.

In the current year he expects growth of 12.4 percent to 13.3 billion euros in online sales, said Ohlmann.

This would increase the share of total business to around 18 percent.

Overall, the trade association expects sales in Bavarian retail to be EUR 72 billion for the current year, which would be slightly more than in 2021.

According to Ohlmann, however, the mask is now on the decline in retail.

While it was clearly dominant on a voluntary basis immediately after the obligation was abolished, it is now only worn by around half of customers - with a downward trend.

On the other hand, it is even more widespread among staff.