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The big discount battle has begun.

Nothing less than “the best deals of the year” are promising German retailers these days.

Because “Black Friday” is imminent.

Whereby the bargain day taken over from America in this country has long since developed into a bargain week.

And this year it could even turn into a bargain month.

Or more.

Because the situation in retail is critical.

“The partial lockdown is leaving deep traces,” complains Stefan Genth, General Manager of the German Trade Association (HDE).

"The shops are starving financially with the shop doors open."

Serious slump, especially in the fashion business

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Because Corona let the frequencies in the inner cities drop dramatically - and with it the sales.

If, however, customers no longer come to the city centers in the usual number, this is a threat to the existence of many companies, especially in the Christmas business, which is usually high-turnover for retailers.

Massive discounts are therefore something of the last hope for many sellers.

A current trend survey by the HDE shows how great the need is at the moment.

According to this, around 40 percent of customers were lost to inner-city retail in each of the first three weeks of November.

In turn, sales fell by around a third compared to the previous week.

And these are just the averages.

In some areas of retail, the situation is much worse, especially in fashion and shoes.

The stores in this segment have an average of 40 percent below the previous year's income, with particularly affected stores it is even up to 80 percent, reports the textile trade association (BTE) and cites the business fashion sector as an example.

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However, the large stores on the popular shopping streets, which are particularly dependent on high customer traffic, also have to fight hard.

“The stationary fashion trade is currently fighting for every single customer,” says Gerrit Heinemann, professor of business administration, management and trade at the Niederrhein University of Applied Sciences.

And the panic was increasing from week to week.

"That's why the price avalanche is being set off there now - and not just on Black Friday."

In any case, Heinemann does not expect prices to normalize again after the upcoming bargain weekend.

"The dealers have practically no other choice than to give high discounts in order to lure enough customers back into the shops."

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However, they cannot afford this method.

Because nothing can be earned with discount goods.

And the dealers in question are already in massive financial straits after the first lockdown in spring.

"The fashion trade is facing a major dilemma," says BTE representative Axel Augustin.

“From a business point of view, companies cannot afford high discounts.

But no customers come without a discount.

And then the running costs for goods, rent and employees are not matched by any corresponding income. ”Every day therefore brings the fashion trade further losses and pushes it even deeper into the red.

But it is not just the need for liquidity that creates high selling pressure.

The special branch of trade also has an additional problem: supply chains and order rhythms.

Goods have to be ordered many months in advance so that fabrics and yarns can be procured worldwide, sewn in the mostly Asian textile factories and finally transported to Germany for weeks.

New storage space is needed as early as December

For example, the current autumn / winter collections, which are currently in stores, were ordered by dealers at the beginning of the year.

Corona was still a distant problem in China, but not a pandemic that largely paralyzes public life in Germany.

So "normal" was ordered accordingly.

"The valid sales contracts could be adjusted occasionally, but basically there are now too many goods for the collapsed demand in the clothing, shoe and leather goods trade", describes expert Augustin.

However, new shelf space and, above all, storage space will be needed as early as December.

Because the first parts of the spring collections are already arriving from Asia, even if the number of orders has been significantly reduced due to the pandemic.

At the same time, there are also goods from the lockdown period in spring in the warehouses, at least the timeless items.

“We have our backs to the wall,” warns BTE representative Augustin.

The fear of the upcoming lockdown extension and / or tightening of the rules by the federal and state governments is correspondingly great.

The HDE therefore appeals to politicians, in this case, to open up emergency aid, as was recently received by other industries, to the retail sector, or at least to make bridging aid possible.

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"The threshold for applying for specific characteristics in retail is too high here," says Managing Director Genth and warns: "The margins in retail are traditionally very low, many companies go bankrupt even if they lose around 20 percent of their sales." Politicians should therefore no longer just watch.

"Now we need to act quickly, otherwise the consequences for many inner cities will be fatal."

By fatal, Genth means the previous forecast of his association, according to which up to 50,000 retail locations could be closed as a result of Corona in the next few years.

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Black Friday

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On the last Friday in November, many retailers are offering some strong discounts.

The first Black Friday bargains are already available on Amazon.

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Scientist Heinemann even considers this number to be low-key and even sees up to 200,000 locations at risk, especially small specialist shops and retailers without chain stores behind them.

“You will die like flies.

And then the inner cities look like Swiss cheese. "

For the BTE, however, it is not only politicians who are called for, consumers also bear responsibility.

“The next few weeks will largely determine how the inner cities and shopping areas will look in the future,” says association representative Augustin.

Anyone who wants to have variety and atmosphere when shopping in the future must support retailers there right now.

Reliable hygiene concepts are in place.

At least not a single case is known according to which customers were infected with Corona while shopping for fashion.

"But if customers only shop online now, the lights will go out in many stores forever and ghost towns will be left behind."

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