Part of the turnover of the stationary retail trade, which was lost to online trade during the shutdown phase, remains permanently lost. This means that the pre-corona turnover level will probably no longer be reached.

The chart of the month shows the turnover trend in stationary retail (total retail turnover minus online turnover, in each case nominal) as an index series from 2010 onwards for the base scenario.

However, the time series from 2010 onwards shows a further development in the stationary retail trade: Retail turnover in the stationary network in the segments electronics/technology, fashionable goods and shoes were already on a downward trend before the crisis, which is largely due to a shift in turnover to online retailing. These are precisely the sectors that are particularly affected by the current shutdown and are thus suffering twice over. As a result, an increase to a pre-corona level will hardly be possible.

The calculations on the development of stationary retail trade turnover are based on the assumptions of the scenarios for the GDP forecast of the German Council of Economic Experts. The base scenario assumes a normalisation of the economic situation over the summer months. For 2020, a decline in gross domestic product (GDP) of 2.8 % is assumed. A catch-up effect would set in in 2021, leading to a GDP increase of 3.7 %.

With the start of the shutdown phase, many of the stationary retail companies affected have stopped or reduced their rental payments. This is because rents are dependent on the retailers' turnover. The question remains open as to how much the current shutdown will affect retail rents in the longer term. In order to obtain an initial indication of the possible extent of the rent reduction, we have prepared a model calculation of the turnover trend in the stationary retail sector. Further information on this topic and the model calculation can be found in the blog article "Corona effect accelerates structural change in the retail sector" (in German).

Contact persons: Dr. Joseph Frechen, Head of Branch Hamburg and Division Head Retail at bulwiengesa, frechen [at] bulwiengesa.de, and Felix Schrader, project manager at bulwiengesa, schrader [at] bulwiengesa.de