Retail Sales Monitor – Issue 1/2023 – Focus: Stationary trade

After the difficult years of the Corona pandemic, the effects of the Ukraine war are now weighing on retail in Germany: massively increased inflation, subdued consumer sentiment and cost increases in rents and shop operations.

In the Retail Sales Monitor - Issue 1/2023 we shed light on the current developments in stationary retail: opportunities of locations, expansion plans and approaches to increase the attractiveness of locations. We describe how stationary retail has changed since 2020 as a result of the pandemic and recent macroeconomic developments and which innovative concepts are considered forward-looking.

• In the long term, retail parks in particular are likely to develop positively, as are neighbourhood locations and prime locations in regional centres. A rather negative long-term development is expected for shopping centres and secondary locations in upper centres.
• On Germany's shopping streets, footfall collapsed during the pandemic. By the end of 2022, footfall had recovered but remained below pre-Corona levels. This is likely due to the cooled consumer climate as well as a shift in consumption towards online and the suburbs.
• Almost one in two retailers (46 per cent) say rents have changed to their disadvantage. In particular, high inflation is having an impact on the index rents contractually agreed with many retailers. On the other hand, from the traders' point of view, lease conditions for terms and special termination rights have improved on average in the sector.
• Despite the difficult general conditions, the share of retailers with expansion plans remains comparatively high, but is significantly below the values from the time before the pandemic. 
• Forward-looking retail concepts take into account the high demands of consumers and offer them special shopping experiences.

In addition, the Retail Sales Monitor 1/2023 provides an overview of the economic development and the situation of the German retail trade in 2022 as a whole. Turnover in the stationary retail trade rose again last year by 1.3 percent after difficult Corona years, whereas turnover in the mail-order and online trade fell by 8.6 percent compared to 2021. The total retail trade in Germany turned over 0.9 per cent less than in 2021.

It is encouraging that consumer sentiment, which was rather depressed in autumn 2022, brightened considerably at the beginning of 2023. Nevertheless, it remains to be seen how inflation will develop and thus real purchasing power. The HDE expects a real decline in sales of 3 percent for the entire industry in 2023. Detailed figures as well as the developments in the sub-sectors food and non-food, fashion, consumer electronics and DIY can be found in the newsletter.

Together with the EHI Retail Institute in Cologne, we highlight the developments, trends and drivers of the industry four times a year in the KPMG Retail Sales Monitor. You can subscribe to our newsletter here.