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In the event of a hard lockdown, the federal government does not want to help the retail sector to the same extent as the catering and other affected sectors in November and December.
Up to now, companies that had to close in November and December because of the so-called “lockdown light” could apply to the federal government for assistance that corresponded to 75 percent of their previous year's turnover.
But if the pandemic measures tighten around Christmas, other industries can only expect reimbursement of their fixed costs.
"In November we introduced the so-called November Aid, because we had to take note that restrictions were imposed on restaurants and hotels, but also cultural institutions and body-related services, which did not apply to the rest of the economy," said Federal Economics Minister Peter Altmaier (CDU) on Friday.
Source: WORLD infographic
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Many of those affected felt it was unfair that only they had to close their businesses.
“That is why we wanted to provide an unbureaucratic way of providing help, which we then continued for December when the partial lockdown was extended,” explained Altmaier.
But this will not be continued now.
Altmaier wants cross-industry rules
"We are now in the situation that we are extending the lockdown measures to other areas, so we come to a lockdown that corresponds in many ways to what was the case in spring," said Altmaier.
"This means that it is now not about special regulations for individual industries, but that together we can return to regulations that have been designed for all industries, across industries, that have proven themselves."
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Instead of the lost sales, companies can only claim a percentage of their fixed costs.
The regulation of the so-called bridging aid III, which should apply from January 1st anyway, will also be applied if a hard lockdown should begin this year.
However, the hurdle is lowered, how big a loss of sales a company has to be in order to be able to apply for help at all.
So far, companies had to prove a minus of at least 50 percent, this limit will now be reduced retrospectively to 40 percent for November and December.
The government wants to ensure that "those who have a claim to reimbursement for their fixed costs who would otherwise not have reached these thresholds," said Altmaier.
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Altmaier emphasized that they had decided against aids that are based on sales, because they could hold out the reimbursement of fixed costs longer.
"This regulation, which runs until the end of June next year, is a regulation that can also be used for a longer period of time," said the Minister of Economic Affairs.
Scholz and Altmaier only partially agree
He does not see any unequal treatment compared to the sectors that receive November and December aid.
"I think it is right and wise that the moment everyone is affected again, we come back to the rule that applies to everyone," said Altmaier.
In the Federal Ministry of Finance of Olaf Scholz (SPD), however, one certainly admits that there is unequal treatment of different industries.
There, however, the procedure is justified by the fact that purchases of goods in retail can still be made up later, when the lockdown has ended, while hotel bookings and restaurant visits are completely canceled.
Scholz and Altmaier agree that bridging aid III should already apply if a hard lockdown begins this year.
According to the Ministry of Finance, it is currently only a question of whether the already increased monthly maximum amount of 200,000 euros is sufficient for the retail trade or whether this cap has to be raised further.
"Financial madness"
Especially among the financial politicians of the Union there has recently been great concern that the aid in the event of a further lockdown could be too generous.
Extending the generous share of sales for restaurateurs to retail would have been "financial insanity," said CDU member Sepp Müller.
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You have to be careful that future generations are not blocked from financial policy, which, as a 31-year-old member of parliament, cannot support.
As an alternative to bringing forward bridging aid III, he brings a repayment subsidy to the KfW loans brokered by banks into play.
This would specifically help those who have already been certified by banks as having the fundamental future viability of business after Corona.
30 billion for November and December alone
The question of when and in what form the federal states will contribute to the costs remains open.
So far, the federal government has paid only for bridging, November and December aid.
There are demands from both the CDU / CSU parliamentary group and the SPD parliamentary group in the Bundestag that the states must also contribute to the costs.
For the November and December aid alone, the Federal Ministry of Finance expects to spend around 30 billion euros.
Closing trade would add large sums of money.
The industry is likely to have generated a large part of its previous year's sales in the pre-Christmas business, but by lowering the default limit to 40 percent, many companies will still be able to apply for help.
"The days between Christmas and New Year's are the week before Christmas Eve with the highest turnover in the Christmas business," says Stefan Genth, General Manager of the German Trade Association (HDE).
The HDE estimates the loss of sales in this particular period for stationary retail in the so-called non-food segment, i.e. excluding the food trade, drugstores and pharmacies, at around one billion euros per day of sale.
That is another 200 million euros more per day than in the rest of the Christmas business, which includes the months of November and December and in which a number of retailers easily make a quarter of their annual turnover, some even up to 40 percent.
Big discounts in stores
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The special significance for the days between the years results from the combination of various factors: On the one hand, many people get money or vouchers at Christmas, so the financial possibilities are greater.
On the other hand, consumers have time because the majority of them are on vacation around the holidays and the turn of the year.
Many dealers therefore give high discounts in order to take advantage of the willingness to buy.
In this exceptional year 2020, particularly high discounts can be expected.
Because for the inner-city shops things are anything but smooth in the Christmas business.
"The lockdown light in November and December already feels like a hard lockdown for many retailers in the city centers," says the HDE.
In fact, the association's weekly trend survey shows that sales and frequencies have plummeted.
In November, for example, the frequency drop was 32 to 42 percent, depending on the week.
And that's just an average.
In individual segments such as fashion and shoe retail, the numbers are much worse with up to 58 percent loss of frequency.
This is also noticeable in sales.
According to the HDE survey, in November they were around a third below the previous year, in December it was still minus 17 percent.
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But here, too, clothing and shoes are significantly worse off, with revenue slumps of a good 20 or even almost 50 percent depending on the week.
In individual areas within fashion, however, even that is not enough.
The suppliers of business clothing, for example, or sellers of bridal wear, are in some cases 80 percent below the previous year's figures, reports the textile trade association (BTE).
The federal government wants a uniform approach
Despite the expected high costs, Minister of Economic Affairs Altmaier spoke out in favor of a tough lockdown between the years.
"Personally, I am of the opinion that we have to look very closely at the Saxon example in order to consider which elements can also be important nationwide," he said on Friday.
Saxony had decided to close almost all companies before Christmas.
Altmaier emphasized that he did not want to anticipate the negotiations with the federal states about further measures, because such a joint approach would be jeopardized.
But: "We have reached exponential growth again, so politics must act," said Altmaier, referring to the number of infections.
“There is pressure to act, yes.” This no longer only applies to individual federal states such as Saxony, but to large parts of Germany.