The number of store bankruptcies increases across Germany – DW – 12/04/2025

The German parliament is discussing a plan to permanently reduce the sales tax on restaurant food to the same level it was during the coronavirus pandemic.

The move is part of a broader effort to support businesses and consumers facing inflation, higher energy costs and weaker purchasing power.

Ministers have already approved Finance Minister Lars Klingbeil’s draft legislation that would reduce the tax on food served in restaurants from 19% to 7%.

The measure still requires parliamentary approval. It is part of the policy package negotiated in the coalition agreement between Chancellor Friedrich Merz’s conservative bloc and Klingbiel’s centre-left Social Democrats.

The coalition, which took power in early May, has made reviving Germany’s slowing economy its central priority.

During the coronavirus pandemic, the sales tax on restaurant food was temporarily reduced to 7% to help the sector through lockdowns, but the rate returned to 19% after restrictions ended.

Germany is seeing an intense wave of retail bankruptcies, with a new study reporting 2,490 bankruptcies between August 2024 and August 2025.

Analysis by credit insurer Allianz Trade said the figure was close to the previous record of 2,520 cases set between 2015 and 2016.

“The retail sector is still grappling with the profound changes in its business model that began during the pandemic,” said Guillaume Dejean, Allianz industry expert. “To face intense competition from major online marketplaces, retailers will have to invest heavily in digital channels, data-driven sales and innovative technologies for store design.”

Allianz Trade said many chains are introducing autonomous warehouse systems, AI-based product recommendation tools and robotic shelf-scanners. Others are testing self-navigating service robots on the shop floor to help customers find items. The insurer said smaller shops are under particular pressure, describing the situation as a “David-versus-Goliath battle”.

The study notes that these innovations improve customer experience and profitability but require large upfront expenses that many small operators cannot afford.

However, the insurer also pointed to positive signs, including growth in real wages and improving credit conditions.

EU finance ministers have agreed to impose tariffs on low-cost parcels from Chinese platforms such as Shein, Teemu and AliExpress “as soon as 2026”, which could ease competitive pressure.

good day From DW’s newsroom in an already Christmassy Bonn.

thank you so much Join us Germany is set to see a near-record number of retail bankruptcies between August 2024 and August 2025, according to a new study reporting.

Insurer Allianz says retailers are under pressure to invest in expensive digital tools, AI systems and automated logistics to compete with major online platforms, leaving smaller shops caught in a “David-versus-Goliath” battle.

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