Retail Sales German Shops Suffer World Cup Slump
The World Cup has failed to spark a boom in consumer retail spending, despite shops remaining open later in the evenings. Extended shopping opening hours during the World Cup appear to have been a complete failure for the retail sector, first indications suggest. Industry journal "Textilwirtschaft" (Textile Economy) reports a five percent dropl in customers in its monthly retail survey for June, compared with 2005. The result represents a two percent year-on-year fall in overall fashion and textile retail turnover. In May, one month before the World Cup, sales were up seven percent on the previous year, perhaps explaining some of the monthly slump.
But, halfway through the tournament, service sector union Verdi was already warning of an "enormous flop" in turnover as visitors to the World Cup failed to deliver an expected sales surge. Apart from a huge boost in football merchandise sales, such as flags, jerseys and fan memorabilia, the union warned that although visitors were filling the cities, they weren't packing the stores. Shops in many German cities, including Berlin's Potsdamer Platz arcade, remained open until midnight and traded on Sundays during the tournament. Such long opening hours are uncommon in Germany, where strict regulations cover retail trading hours. The late evening hours were particularly disappointing, though Sunday trading fared better. Trade unions such as Verdi are vehemently opposed to expanding shop hours, so their alarm might be overdone.
Before the tournament began there were hopes the World Cup might deliver a spending splurge, with an extra €2 billion being spent in the shops and even the prospect of a slight rise in GDP. The retail sector hoped extending shopping hours would tempt visitors and German consumers into stores and that the more liberal retail trading times would become a permanent fixture once the tournament was over. But, while Germans may have been spending money on flags and food and drink, it appears they have shied away from other retail purchases while the World Cup was underway.
The German parliament approved a constitutional amendment on June 30 overturning a federal law restricting store opening hours. From now on, German states will be able to set their own shopping hours, with the country's large cities expected to grant permits for stores to stay open beyond 8 p.m. on weekdays and Saturdays. However, Sunday opening remains a bone of contention, with conservative religious groups and leftist trade unionists both opposed to Sunday shopping. Many state governments are therefore likely to come under pressure to continue an outright ban on Sunday trading.
