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Berlin Benefits from Rise in Purchasing Power

Berlin has consolidated its position as thriving business location with fast-growing retail sales. The trend is particularly conspicuous in the eastern and western town centres of City West and Alexanderplatz, respectively.

In its annual report for 2015, the Berlin-Brandenburg Retailers Association (HBB) highlighted the rapid growth in retailing. Total retail revenues in Germany's first city equalled 15.58 billion euros. The year-end figure for the greater metro area in Brandenburg was 7.77 billion euros. These sums imply an adjusted increase in revenues by 5.1 and 2.4 percent, respectively. Retail spendings account for more than one quarter of the expenditures by general population.

The increase in revenue has also led to the creation of new jobs. The full-time employment share in the retail sector has gone up by 1.6 percent in Berlin and by 0.9 percent in Brandenburg.

Several Factors Act as Growth Engine

There is more than one reason for the rise in purchasing power in Berlin. Incoming migration is causing the city to grow, and with its the potential consumer base. Moreover, income levels are going up while the number of jobless is going down. Online retailing experienced enormous growth in revenue, gaining by more than one fifth in 2015, which is not least explained by the high number of start-up businesses in Berlin. Many of these have expanded their business to include the international market.

The many domestic and foreign tourists in the city spent approximately four billion euros in 2015, the equivalent of more than a quarter of the total revenues. For some of the retail companies in the inner city, tourists account for 40 to 60 percent of the sales total. The most spendthrift visitors came from Spain with nearly 22 million euros in consumer spendings, and from the UK with more than 18 million euros. Aside from the hotel and catering trade, retailers were among the businesses that benefited most.

Boosting the Upward Trend

Berlin presents itself increasingly as a modern shopping city of tremendous appeal and special event character. Highly popular among visitors from inside and outside Germany, but also among locals, are the “shopping Sundays.” While retail businesses are closed on Sundays under German law, cities are at liberty to declare several shopping Sundays per year, usually supplemented by special sales and events. Shopping Sundays are a substantial source of extra revenues for Berlin's retailers. Other retail events that help to position Berlin as an attractive shopping destination include the end-of-season sales, as well as the various Christmas Markets during the run-up to the holidays.

In recent years, more than 900 stores and companies showed their commitment to customer service by seeking certification with the “Ausgezeichnet generationenfreundlich” label for special cross-generational awareness by the German Retail Federation (HDE). Stores applying for the quality label will be tested for compliance with the special shopping requirements of parents with push chairs, disabled people in wheelchairs, and the elderly, among other groups. Certified stores feature anti-slip flooring, common area seating, as well as qualified assistance and signage. It is the sort of thing that will reassure shoppers, yet it also acts as a competitive market advantage that will actually boost sales.