Retail sales growth in Germany’s residential areas and suburbs has grown strongly, while spending in city centers remain below the pre-pandemic levels as many people continue to work from home, results of a study by the ifo Institute showed Monday.<\/p>\n
The ifo study covered locations in Berlin, Munich, Hamburg, Stuttgart and Dresden.<\/p>\n
The study found that private spending in the city center was still 5 percent lower than in 2019, Oliver Falck of the ifo Institute, one of the co-authors of the study, said.<\/p>\n
On the other hand, consumer spending surged up to 30 percent, particularly in areas where many people could work from home.<\/p>\n
The study is based on aggregated and anonymized retail sales data provided by Mastercard as well as on small-scale data about employees’ potential to work from home collected by infas 360 on behalf of the ifo Institute.<\/p>\n
Almost 25 percent of employees have been working from home since the pandemic, at least one day per week, Carla Krolage of the ifo Institute, another co-author of the study, said.<\/p>\n
This led them to do more of their shopping in areas where they live and recent analysis found that this shift in consumption was especially prevalent on weekdays.<\/p>\n
“We expect this change in shopping behavior to persist,” Krolage said.
Meanwhile, the share of online shopping in total private spending have decreased after the pandemic.<\/p>\n
Online sales accounted for 21.2 percent of total private spending in the summer of 2022, ifo said. That was over 2 percentage points less compared to the same month of the previous year.<\/p>\n
“The pandemic has had a lasting effect on the world of work and people’s shopping behavior,” Falck said.<\/p>\n
“A lasting increase in remote working and online shopping as well as small-scale changes in consumption make it all the more critical for city centers to adjust their concepts to the new normal and become more attractive.” <\/p>\n