German Suburbs Log Strong Gains In Consumer Spending Due To Remote Working: Ifo Study
May 07 2023 - 11:53PM
RTTF2
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.
The ifo study covered locations in Berlin, Munich, Hamburg,
Stuttgart and Dresden. 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.
On the other hand, consumer spending surged up to 30 percent,
particularly in areas where many people could work from home.
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.
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. 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. "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. 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.
"The pandemic has had a lasting effect on the world of work and
people's shopping behavior," Falck said. "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."
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