Corona crisis in Germany: Retail expects up to 50,000 bankruptcies

The German retail sector expects up to 50,000 bankruptcies in the sector due to the Corona crisis. During the four-week closures of non-food stores, around 30 billion euros in sales had already been lost. This could not be recovered, Stefan Genth, the chief executive of the German Trade Association (HDE), told the newspapers of the Funke Mediengruppe. It was around one billion euros a day.

In addition, customer traffic has been subdued since the reopening of many stores on Monday last week.

Currently, trading continues to lose “a high three-digit million amount” every day, Genth noted. The HDE expects the number of 50,000 bankruptcies because the equity capital of many companies is not sufficient, especially in view of high rental claims.

Institutional landlords in particular are often unwilling to deferre the rent or demand deferral interest rates of five to nine percent, Genth criticized: “Here we demand a risk sharing.” Both large branch entrepreneurs and small shops are affected. “We are very afraid that after the crisis the inner cities will not look like they did before the crisis – and many shops are missing,” said the HDE chief executive.

“Buy-on-site voucher” to support retail

Politicians are also concerned with the consequences for the retail trade. In order to cushion the impending collapse, a group of Green MPs had recently called in a position paper for a “buy-on-site voucher” for all German residents.

The paper states that everyone should receive a voucher worth 250 euros – this can be redeemed “only in brick-and-mortar stores, for stationary services or in the catering industry”. Excluded were shops which were not affected by the shutdown. Furthermore, the voucher may not be used in online retail.