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Germany: bakeries lose EUR 1 billion due to coronavirus crisis

October 12, 2020 7:14 PM, Der AUDITOR
Bread sales have slumped in Germany in 2020. @German Bakery Trade Association, Green Week 2017
Bread sales have slumped in Germany in 2020. @German Bakery Trade Association, Green Week 2017
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BERLIN. A survey recently conducted by the local craft bakers associations and by the German Bakery Trade Association shows that sales have slumped by 13% during the coronavirus crisis. Bakery stores with cafés are particularly hard-hit. Issue is that fewer customers visit the shops.

Accumulated loss of EUR 1 billion

German Bakery Trade Association president Michael Wippler confirms that, "craft bakers are missing an accumulated amount of more than one billion euros in turnover in the cash registers". Bakery cafés suffered particularly heavy losses in sales during lockdown. More than 86% of the companies surveyed state that coffee, hot drinks and snack sales slumped. Bread and bakery product sales have also declined sharply according to 54% of bakeries surveyed. Declines in footfall are also striking as 56% report a loss in customers, whereas only 28% have witnessed a rise. 

Industry shows relative robust response to crisis
Since as many as 1,100 bakeries took part, the survey is viewed as the most detailed overview of the industry conducted since the pandemic struck and "provides a realistic image" as CEO Daniel Schneider states. Although losses are high, Schneider is confident that bakeries will get off comparatively cheaply "as long we return to normal operation mode as quickly as possible".  For instance, it is encouraging that 60% of the companies have not required state aid so far. Although 31% of companies received emergency aid, short-time allowances and tax deferrals, these measures succeeded in preventing 88% of companies from laying off staff.  Around half of the bakeries surveyed also responded swiftly to the crisis by changing their product range and 30% by working multiple shifts in production Training and education also continues unabated in 89% of companies and 88% will continue to recruit and train young people. 

Second lockdown and further restrictions to be avoided at all costs 
The crisis has, however, also generated severe backlashes for the industry and the outlook is definitely bleak. Although nearly all companies agree that the measures adopted to curb the spread of the virus are sensible, most also view them as a burden. Mandatory face masks for staff and customers along with the restrictions on people allowed to enter shops generate enormous setbacks. Dealing with customers refusing to wear face masks is an additional problem. Bakeries also do not expect to be able to resume normal operations any time soon. Most companies reckon that this will only be possible as of summer/autum 2021 and 23% are reckoning with 2022 at the very earliest. Schneider is, in addition, highly concerned over bankruptcy risks. Problem is that more than twice as many companies as last year reckon that they are running a high risk of having to file for bankruptcy. A second lockdown and further restrictions on public life have to be avoided at all costs, "otherwise many companies will get into trouble," as Schneider warns.


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