Corona has permanently damaged retail in German city centers, according to an analysis by the Ifo Institute. Even after the pandemic is over, things are struggling to pick up. Sales profits are now elsewhere.
In March, retail sales in the inner cities of Berlin, Munich, Hamburg, Stuttgart and Dresden were still five percent lower than before the 2019 pandemic, economic researchers said Monday.
“At the same time, residential and suburban areas are seeing sharp increases in revenue,” says economist Oliver Falck, one of the authors. According to Falck and his colleagues, the cause of the phenomenon is that many people still work from home even after the end of the pandemic.
Home office has changed a lot
The evaluation was based on anonymized Mastercard payment data and a geodata analysis for working in the home office of Infas 360, a subsidiary of the market and opinion research group Infas. Private consumer spending increased by as much as 30 percent in areas where many people work from home, according to the study.
“Almost 25 percent of all employees have been working from home at least one day a week since the pandemic,” says co-author Carla Krolage. “These employees are also increasingly shopping close to home. We expect this change in shopping behavior to continue.”
However, according to the Ifo Institute, stationary retail in general has regained market share over online retail. In the summer of 2022, online sales accounted for 21.2 percent of private consumer spending, a decrease of more than two percentage points compared to 2021.
Source: Krone
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