- Financial TImes
At this time of year, Jens Begeschke would normally be preparing to sell his range of handmade paper lanterns to glühwein-drinking customers at dozens of Christmas markets across Germany.
But the second wave of coronavirus infections and lockdowns has led to the cancellation of almost all of Germany’s 3,000 festive markets, wrecking Mr Begeschke’s plans and throwing the fate of thousands of businesses such as his into doubt.
“We ordered the products from our suppliers in India in February: we could not have anticipated the impact of the virus then,” said the 48-year-old, who has run Sterne vom Himmel — Stars from Heaven — for the past decade.
Although he has also been selling via his website for several years, Mr Begeschke doubts online orders will make up for the loss of the majority of his business that usually comes at this time of year. “We’re totally reliant on the Christmas markets. I worry our suppliers might go bankrupt if we don’t order anything next year,” he said.
Across Europe, retailers are pleading for governments to lift lockdowns to save the crucial shopping period between the Black Friday promotions on November 27 and Christmas. These four weeks generate 20-50 per cent of annual sales for many non-food retailers, according to Eurocommerce, the EU retail trade association.
Chart showing retailers have rebounded but critical Christmas period looms
The latest lockdowns, which have closed non-essential shops in a host of European countries and restricted movement and social interactions, would make this year “particularly challenging”, said Christian Verschueren, Eurocommerce director-general.
Smaller retailers “will struggle to survive any extended period of lockdown”, he warned. “Some of our members are predicting up to 30 per cent of clothing shops, who depend particularly on the Christmas period, will never open again.”
La Fée Qui Cloche, a toy store just north of Montmartre in Paris, is another business confronting huge challenges. Miya Pellissard-Yadan, its owner, said she was extremely angry that hers and other non-essential retailers had been forced to close as part of France’s lockdown. “It’s just horribly unfair,” she said.
The shop would usually make 15 per cent of its annual sales in November and a further quarter in December, Ms Pellissard-Yadan said.
Visitors walk along the boulevard Unter den Linden in the German capital Berlin © Maja Hitij/Getty
Shoppers browse among Christmas trees and decorations at Piazza Mercato in Naples, Italy © Ciro Fusco/EPA/Shutterstock
But banned from admitting customers, she has instead cobbled together a click-and-collect system for them to call or text their orders and pick up. But she has no illusions that this will compensate for the lack of footfall. “Buying a stuffed animal for a child online makes no sense. People want to touch it,” she said.
French high street shops were given some relief on Friday when Amazon said it would bow to political and business pressure by delaying the start of Black Friday promotions in France by a week to December 4. Frédéric Duval, head of Amazon France, said this week that its sales had risen 40-50 per cent since the French lockdown started at the end of October — in line with other internet retailers.
Retail sales in the eurozone fell by a record 21 per cent in the two months after the pandemic hit in March, before rebounding quickly back above last year’s levels once the initial lockdowns were lifted. The biggest year-on-year growth has been in mail order and internet sales as consumers shift spending online.
However, eurozone retail sales started falling again in September as the second surge in the virus gathered pace. Most economists expect the autumn lockdowns to cause a much bigger drop in sales after a survey of purchasing managers in October pointed to reduced activity at many services businesses. The EU consumer confidence indicator for November, published on Friday, is expected to fall to its lowest level since May.
Some believe vaccine breakthroughs announced this month by BioNTech/Pfizer and Moderna will provide sufficient hope to allow many shops, restaurants and other customer-facing businesses to keep struggling on for better times ahead.
“It’s a really grim outlook,” said Anatoli Annenkov, economist at French bank Société Générale. “But with the vaccine on its way, there will probably be enough investment to keep most of these businesses going.”
Total spending on Black Friday and Cyber Monday in Germany
Mohaba, which makes glühwein mugs for Christmas markets across Germany and around the world, is counting on a coronavirus treatment after sales plunged three-quarters this year, forcing it to postpone a €3m investment in a new production facility.
“The straw I’m clutching at is the Covid-19 vaccine,” said Guido Schlepütz, who runs the company. “If it’s available in the first quarter and there are no further lockdowns . . . [it will determine] whether we will have our life as before the pandemic.”
In Italy, retailers remain closed in most regions until at least early December, while average household Christmas expenditure is set to fall 15 per cent this year, according to the Codacons consumer association. “Santa’s sleigh will be lighter this year as many families begin to feel the squeeze of the Covid-19 crisis,” said Carlo Rienzi, Codacons president.
With many people continuing to work from home, restricted in their ability to travel or socialise, a surge in online sales is predicted alongside higher demand for computing equipment, fitness trackers and gadgets. GfK, the research company, forecast these trends would help keep Black Friday sales stable at about €1tn this year in the 70 countries it tracks — after growth of 20 per cent last year.
But this shift is likely to primarily benefit larger retailers with a bigger online presence. Fnac Darty, the French electronics, books and music chain, said it expected to fare better in the second lockdown than the first because its stores remained open for essential sales and its online service was proving popular, said Enrique Martinez, chief executive.
Some products would also sell regardless, he said, such as the new Sony PlayStation 5 console released this month. “A passionate gamer is not going to wait till the end of lockdown to get his PS5,” he added.
At La Fée Qui Cloche in Paris, Ms Pellissard-Yadan pointed to another bright spot amid the gloom: sales of board games. Everything from classics such as Scrabble and chess to newer games including The Mind had been flying off the shelves, she said.
“Everyone is bored at home,” she added ruefully.
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