XXXLutz boss: “Corona economic aid is not even a drop in the ocean for large retailers”. Call for VAT lowering to stimulate consumption.
The new aid announced by the government on Sunday as part of the lockdown extension has met with criticism from retail chains. “The Corona economic aid is not even a drop in the ocean for large retailers,” said XXXLutz spokesman and head of marketing Thomas Saliger on Monday at the APA. In the whole of last year there was an upper limit of aid at 800,000 euros, now the upper limit is only 60,000 euros per month.
Yesterday the trade association had already criticized the new “failure bonus”. The amount of 30 percent of the loss of sales compared to the same time last year was “completely inadequate for the retail industry like the upper limit of 60,000 euros, which misunderstood the liquidity situation of the companies”, it said yesterday. Commercial operations – with the exception of grocery stores, pharmacies and tobacconists – have been closed for normal customer traffic since December 26th due to the corona and, according to the current plan of the turquoise-green government, may not reopen until February 8th. In the currently ongoing third corona lockdown, retailers may first hand over pre-ordered goods to customers (Click & Collect).
WKÖ trade chairman Rainer Trefelik believes that the new Corona economic aid for many small and medium-sized businesses is immediate, quick help. For larger companies it will still be a challenge to work out the ideal solution for their own company from the mix of help, together with tax advisors, Trefelik told the “courier” (Monday edition). Postponing the opening of trade is painful, but constant locking and unlocking would be even worse, Trefelik told the “Salzburger Nachrichten” (Monday edition). The strategy of step-by-step opening will only work, “if everyone is aware of the seriousness of the situation and keeps their distance and wearing masks,” said the trade chairman. “Otherwise the exercise is pointless and we have economic disaster.”
Due to the extension of the third corona lockdown until the planned opening on February 8, the closings of shops due to the Covid-19 pandemic in 2020 and 2021 now add up to 90 shopping days. According to estimates by scientists at the Johannes Kepler University (JKU) Linz, the lockdown-related loss in sales by dealers will total 9.7 billion euros. “The elephant in the room is the uncertainty about when and how many follow-up purchases will be made via the stationary trade,” said study authors Christoph Teller and Ernst Gittenberger from the JKU Institute for Trade, Sales and Marketing in a broadcast on Monday. After the consumer sentiment remains in the basement, the extent to which the neglected will be made up will probably decrease noticeably after the renewed lockdown extension, the scientists expect. Online trade is the beneficiary.
The furniture chain XXXLutz advocates Corona economic aid that also stimulates consumption. “Here we could imagine a temporary reduction in sales tax of 5 to 10 percent for at least six months,” said XXXLutz spokesman Saliger. This would motivate consumers to make investments. As part of the Corona stimulus package, Germany reduced the regular tax rate from 19 percent to 16 percent by the end of 2020. Until December 31, the reduced tax rate was 5 percent instead of 7 percent. The XXXLutz manager sees the domestic short-time work regulation very positively. “We would like to express great praise to the social partners for the short-time work regulation.”
The online shop and Click & Collect are well used by XXXLutz customers, but can only cushion the loss of sales due to the closed shops to a limited extent. “Large-scale sales cannot be caught up with online furniture retailing, since customers want to experience the color and fabric samples as well as quality criteria in the furniture store, especially when it comes to higher-quality furniture,” says Saliger.
