As Germany begins the process of loosening restrictions, Hubertus Schroeder looks at what this could mean for the UK in the near future.


What are the relaxations in Germany?
  • Germany-wide, smaller shops with a sales area of up to 800 square metres are allowed to reopen.
    • UK: likely to define 'small' as much smaller – 280 square metres is the measure adopted in Sunday trading legislation since 1994?
  • In addition, regardless of the size of their sales area, car dealers, bicycle dealers and bookstores have been exempted from the lockdown 
  • Some German states also exempt furniture stores and baby markets or other larger stores if the actual sales area is limited to 800 square metres
  • Certain outdoor sports allowed again at least in some states, in particular golf and tennis
  • Large department stores have sought temporary injunctions (asserting unequal treatment in relation to restriction in size and by reference to retail sectors); they have not been successful so far – the unequal treatment is justified in view of the courts 
Practicalities – how does re-opening work?
  • Access control by security personnel
  • Distance controls of 1.5m remain in place, only one customer per 20 square meters recommended
    • UK: 2m distancing likely to remain (now supported by Government Regulation in Wales and Scotland, expected for England also) 
  • Further hygiene controls by regular cleanings of changing rooms and having a waiting period between individual customers using the room in order to avoid airborne infection (risk of infection from trying on clothes is seen as negligible
    • UK: to be tested if the same view holds – see below)
  • Mixed picture among German states with regard to requirement to wear face masks in public – we expect it to  apply in most states in the course of next week, but with different requirements in detail
    • UK: becoming a key debating point in lockdown exit strategy, likely to be adopted as control measures by retailers/manufacturers, even if not legally required?; debate starting already about what amounts to a “mask” to avoid excessive demand outstripping supply
    • more likely follow established supermarket, pharmacy approach? - restrictions on numbers in store, use of card only, closure of changing rooms, changes in store set up, fewer SKUs, different stock prioritisation, fewer manned checkouts, increased hygiene controls and provision of sanitisers, consideration of use of PPE and/or plastic screens at tills, advisory measures to limit what customers touch in store (as started by Asda and Lidl this week)
    • home delivery (or click and collect) solutions for smaller stores will remain critical
    • more to follow, including on strategies for coming out of furlough
Initial reaction?
  • Many small retailers are only ramping up their businesses
  • slowlyCurrently, no rush of customers to the re-opened store
What next?
  • Ongoing discussion/challenge on Practicalities (above)  
  • Federal Government discusses further easing on a fortnightly basis, the next meeting to take place on 30 April
    • UK: we have so far seen less governmental visible flexibility and appetite to review; note also the impact on the federal system in Germany allowing state by state differences and agility – UK broadly needs a 'one size fits all' approach (Scotland and Wales taking different paths in some respects)
  • Church services expected to be allowed next, however further measures will in general depend on the results of the previous easing measures
  • Reopening at least of smaller hotels and restaurants on the short-term agenda due to their massive financial challenges, also additional state aid expected 
  • Large events, cultural facilities and indoor sports facilities to remain prohibited/closed until autumn
  • Increase of short-time work compensation for employees from 60% to 80% currently being discussed, in order to assist employees affected from short-time work (currently record level) and to stimulate demand at the same time
Longer term picture?

Consumer behaviour has changed significantly during CV-19 crisis (Germany having been relatively slow to embrace e-commerce until now); the switch to e-commerce is expected to continue, particularly for food and grocery shopping.

Key contact

Hubertus Schröder

Dr. Hubertus Schröder

Partner, Corporate
Germany

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