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Germany: Retail sales have seen the largest increase in sales since 1994

The online business is booming, it increased by 31.8% in 2020, and supermarkets also benefited from the pandemic. The retail sector has thus drawn a surprisingly positive balance for the past year.


Record increase in sales for German retailers: Despite the corona crisis, last year they probably earned 5.3% more than in 2019, as the Federal Statistical Office estimated on Tuesday. This is the strongest increase since these statistics began in 1994 and is the eleventh year of growth in a row. Adjusted for price, there was also an increase of 4.1%. These estimates take into account the lockdown in the second half of December and retail sales for the months of January through November 2020.


"The bitter losses of many inner-city retailers are offset by good business in the areas of online, food and furniture," said the chief executive of the HDE retail association, Stefan Genth. While sales by mail order and internet retailers rose by 31.8% in real terms over the year, textile suppliers had to cope with a drop in sales of 20%. They obviously benefited less than hoped from the store openings that were still allowed in November. The retail trade with goods of various kinds, including supermarkets and department stores, also managed to jump in sales of 8.5%.


November business was brilliant

The retail sector performed even better than the annual average in November: with an average price-adjusted increase in sales of 5.6% compared to the same month last year, business went brilliantly. Including the price increases, the dealers even had 6.5% more money in their coffers, as the Federal Statistical Office reported.


Furnishings, household appliances and building supplies were particularly in demand with customers, with an increase of 15.4%. Sales of food and beverages increased by just 0.8% in November, but grew by 5.1% in the period from January to November.


"Disaster year for the fashion trade"

Many other retailers, on the other hand, were caught off guard by the corona crisis: The trade in textiles, clothing, shoes and leather goods collapsed from January to November by 21.1% compared to the same period last year. Textile goods and department stores recorded losses of 8.9%. "2020 was a real disaster year for many fashion retailers," said Genth. "If the federal government does not quickly improve state support here, we will experience a bankruptcy wave never seen before."


Little stimulus to consumer spending came from the temporary VAT cut. A study by the Ifo Institute showed that this brought 6.3 billion euros in additional consumption. Surveys suggested, however, that the stated goal of the state had not been achieved to induce citizens to make larger purchases. The federal government temporarily lowered the rate from 19 to 16% from July to the end of 2020 in order to boost consumption and the economy in the corona crisis.


Christmas business got off to a good start thanks to Black Friday

The important Christmas business got off to a surprisingly good start for the industry. In November, which is characterized by campaign days such as Black Friday, sales rose in real terms by 1.9% compared to the previous month. Economists polled by Reuters had expected a minus of 2.0%. The unexpectedly good performance suggests that private consumption stabilized the economy in the fourth quarter as well and prevented a major slump due to the lockdown.





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