International -- Intl' Business: GERMANY
WILL GERMANS BE ABLE TO SHOP TILL THEY DROP? (int'l edition)
It's 1:45 on a Saturday afternoon on Munster Square in central Bonn, and panic is in the air. In just 15 minutes, all stores will shut down for the weekend. A young man dashes around a Greenpeace banner and nearly topples a bicyclist in his scramble to enter a clothing shop. At a nearby Kaufhof department store, heated words are exchanged as seven cart-pushing shoppers jockey for space in front of the dairy case. Upstairs, a woman stuck in a long line asks if another register is open. "That's what you get for shopping on Saturday," snaps a clerk.
Not that things are much better on any other day for German consumers. Limits on store hours, among the severest in Europe, force Germans with full-time jobs to cram all their errands into lunchtime, Thursday evenings until 8:30, and Saturday mornings. But after years of waffling, Chancellor Helmut Kohl's ruling coalition has finally agreed to loosen the laws governing the country's $650 billion retailing industry. It proposes that, starting in mid-1996, stores be allowed to stay open until 8 p.m. during the week, instead of 6:30, and 6 p.m. on Saturdays, instead of 2 p.m. While 24-hour Safeway stores and classy, Nordstrom-type service are still a long way off in Germany, "it's a big breakthrough," says retail economist Uwe Tager of IFO, a Munich-based think tank.
Small shopkeepers and unions fiercely oppose longer store hours, but the politicians, consumers, and big stores pushing for change seem to hold the edge, especially now that Germany's economy is faltering and unemployment is rising. The politicians were emboldened by a recent IFO study, commissioned by the Economic and Labor Ministries. The study argues that a 10 p.m. closing time would create over 50,000 jobs and boost retail sales by 2% to 3%, or by more than $14 billion a year.
The timing is also good for political reasons. Kohl wouldn't touch the issue ahead of 1994 elections because it is so controversial. But by acting now, he can push through the new laws and manage any fallout long before the next elections in 1998.
German consumers, meanwhile, are getting more impatient--and willing to do something about it. As they travel to neighboring countries such as Holland, Belgium, and France where retailing laws are less restrictive, they see how convenient shopping can be. While prices are about the same, selections are often better. Parking lots are full of cars with German license plates in the Dutch town of Maastricht, for example, where store hours stretch to 5 p.m. on Saturdays. Thomas Mayer, chief economist of Goldman Sachs in Frankfurt, notes that private consumption in Germany, which includes the purchase of foreign exchange for buying abroad, is up 2% this year while retail sales are down 2%.
But the opposition is ready to fight expanded store hours. "We cannot live with this," says Gunther Wassmann, deputy managing director of the German Retailers Assn., which represents some 100,000 retailers, big and small. He estimates that, with labor a huge portion of total costs, overall costs could rise 2% to 3% and that the increase will be passed on to the consumer in higher prices. Most of Germany's 170,000 family-run shops are also dead set against change. Marie-Luise Eichner, who operates a small wine shop in Bonn with her husband Hans and his sister, says she can't afford to hire more people for a later shift. Proponents of later hours, she says, "should come here and work an 11-hour day with me."
STRONG FEELINGS. Union negotiations will complicate any change. Working hours are written into the current contract, valid through the end of 1996. In the new contract, union leaders are expected to push for overtime rates for evening work for their members rather than allow the creation of part-time jobs to cope with more flexible store hours.
Given the strong feelings on both sides, making major changes will be a long-term process. No one has even dared to suggest Sunday shopping in Germany, even though a favorite Sunday pastime is a stroll through town window-shopping before afternoon cake and coffee, or peering through the gates of BMW lots. "It has something to do with German mentality," says Rainer Wezel of the Institute of Applied Consumer Research near Cologne. "We are used to having rules." But easing the retailing rules could be just what Germany needs. Giving consumers more opportunities to spend their money could help kick-start the economy, create jobs, and just may even help Germans relax a bit, too.By Karen Lowry Miller in Bonn