Ifo-Institut: Corona damage for retail in the city center permanently

According to an analysis by the Ifo Institute, the corona pandemic has permanently damaged retail in city centers.

Ifo-Institut: Corona damage for retail in the city center permanently

According to an analysis by the Ifo Institute, the corona pandemic has permanently damaged retail in city centers. In March, retail sales in the inner cities of Berlin, Munich, Hamburg, Stuttgart and Dresden were still five percent lower than before the pandemic in 2019, as the Munich economic researchers announced on Monday.

"At the same time, residential areas and suburbs are seeing strong sales gains," said economist Oliver Falck, one of the authors. According to Falck and his colleagues, the cause of the phenomenon is that even after the end of the pandemic, many people work in the home office.

The evaluation was based on anonymized payment data from Mastercard and a geodata analysis for working in the home office of Infas 360, a subsidiary of the market and opinion research group Infas. According to the study, private consumer spending increased by up to 30 percent in areas where many people work from home.

"Almost 25 percent of all employees have been working from home at least one day a week since the pandemic," said co-author Carla Krolage. "These employees are also increasingly shopping close to where they live. We assume that this change in shopping behavior will remain."

Overall, however, stationary retail has regained market share compared to online retail, according to the Ifo Institute. 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.

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