Crack in the German trade association: Non-food retailers like Kik criticize special treatment for food retailers

  • In light of the ongoing partial lockdown, many non-food retailers such as Kik, Deichmann and S.Oliver are complaining about unequal treatment by politicians compared to food retailers. They have therefore launched an initiative to make their voices heard before politicians.
  • As Business Insider has learned from industry circles, some members are not satisfied with the representation by the German Retail Association (HDE). The HDE, they say, is closer to food retailers than to non-food retailers.
  • The head of Kik, for example, emphasizes that the initiative was created together with the HDE, but also says that a uniform representation of interests across the different sectors is not always easy.
  • See more stories on Insider’s business page.

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German retailers have been in lockdown for months. For many non-food retailers, the situation is now “dramatic,” warned the head of fashion retailer Breuninger recently, for example. While grocery stores and drugstores have been allowed to remain open without restriction, many other businesses are facing the loss of their livelihood.

That is why tensions have now formed within the German Retail Association (HDE). “Non-food retailers fear for their livelihoods, while food retailers and drugstores are raking in record sales,” said Kik CEO Patrick Zahn when asked by Business Insider. What the textile discounter CEO particularly dislikes is that many grocery retailers have expanded their offerings of apparel and other non-food products during the crisis, he said. “This imbalance needs to be addressed equally within the association and externally,” Zahn says.

As Business Insider has learned from industry circles, some non-food retailers are not entirely satisfied with the HDE’s representation. The tenor: due to the HDE’s historically closer ties with the food trade, the association has not done enough for the interests of textile and non-food retailers. The focus here is on HDE President Josef Sanktjohanser, who as a former board member at Rewe has already represented the strong position of food retailers in the leading association for 15 years.

“Differences of interest within the association” must be balanced out

In the past, Kik has “always maintained a professional and extremely helpful exchange with the HDE’s specialist departments” and the HDE has represented its interests well, explains Kik boss Patrick Zahn. At the same time, however, he lets it be known that “the current exceptional situation has shown, however, that there is an increased need for internal coordination between the food retail sector, which is traditionally strongly represented in the HDE, on the one hand, and the non-food sector, on the other.” This wording strengthens the suspicion that there is a feeling of internal unequal treatment. This issue needs to be addressed together with the HDE, it continues. Uniform representation of interests is not always easy to establish across its large number of members and their different sectors.

The companies Thalia, Kik, ECE, Breuninger, S.Oliver, Deichmann, Garhammer, Ernsting’s family, and Katag, therefore, joined forces in February to form the initiative “Das Leben gehört ins Zentrum” (Life belongs in the center) to make their interests heard vis-à-vis politicians. Not against, but alongside the HDE, as Zahn emphasizes. The German Retail Association (HDE) and around 50 other well-known companies support the alliance, according to the website. The campaign organizers initiated meetings with the Minister of Economics and Finance, at which they presented, among other things, a 7-point plan “for safe, hygienic store opening to revitalize German city centers.”

On the one hand, the initiative calls for equal treatment with the grocery trade and for the possibility of reopening stores to be based not only on current incidence figures but also on the occupancy of intensive care beds. Representatives also called for eliminating the sales cap on Corona aid. Because the nine campaign initiators all have sales of more than one billion euros a year under normal circumstances, they previously did not receive any state compensation for losses, as this only applied to companies with annual sales of up to 750 million euros. This regulation was abolished by Economics Minister Altmaier (CDU) at the beginning of March – but only after the meeting, following pressure from the company bosses. This was an initial success for the initiative.

But wouldn’t this have been the task of the trade association?

The association defends itself. “It is more than understandable that the nerves of many forcibly closed dealers are bare. Nevertheless, we have achieved a lot for our retailers, especially in the non-food sector,” it says. For example, HDE President Sanktjohanser has represented the entire retail sector to politicians and the public in top-level talks with members of the German government and the Chancellor, such as last week’s social partner dialog. There, for example, he had called for the “necessary opening perspective and finally effective economic aid” for the closed trade in talks with the Chancellor. The association had accompanied the initiative from the beginning and welcomed it, “as creative, attention-grabbing and joint campaigns such as these, which optimally and visibly complement the political representation of interests of the HDE.”

There are even reports from non-food retailers that they are considering splitting off from the HDE. So far, however, none of the companies has officially confirmed this. The textile discounter Kik informs Business Insider on request: “Kik is not involved in such considerations and can therefore not confirm this plan.”

The non-food retailers’ own initiative could be interpreted as a solo effort out of frustration. However, no retailer wants to admit this openly, although the statements of the Kik boss also indicate this. A Deichmann spokesman also said that the initiative sees itself as a “cooperative, constructive complement to the HDE, which represents the entire industry well, and works hand in hand with it.” S.Oliver CEO Claus-Dietrich Lahrs also told Business Insider something similar.

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