Issue of Longer Shop Hours Riles Germany's Retailers

Politicians face pressure from consumers to relax restrictions

GERMANY may be the economic powerhouse of Europe, but many Germans freely admit it's not exactly a shopper's paradise.

In a country that thrives on rules and order, the retailing sector is especially rigid. Everything -- from shopping hours, to when stores can offer discounts -- is strictly regulated. Virtually all stores are closed on Sundays.

Pressure to relax restrictions, especially shopping hours, is again building among the population. And some politicians say liberalizing legislation is urgently needed. Yet most small-business owners don't see it the same way.

''We'd love to leave everything as it is,'' says Ulf Kalkmann, co-chairman of the Retail Trade Association of Hamburg.

The attachment of retailers to the status quo is a major factor in the issue now facing not just the German retailing sector, but the economy in general. Since last century's Industrial Revolution, Germans have traditionally resisted change. Somehow, though, the German economy has always managed to catch up, and sometimes surpass, its competitors.

But in this new era of computerization and global competition, change is occurring at a dizzying rate, and there is less time to adapt. The longer Germans put off change, caution some politicians, the more difficult it will be for Germany to keep pace with innovation and maintain the country's competitive edge.

''The lack of mobility and flexibility in Germany is one of Germany's major disadvantages,'' says Otto Graf Lambsdorff, a leader of the Free Democratic Party, the junior member of the governing coalition.

Chancellor Helmut Kohl's government has declared economic liberalization to be a priority in the current legislative term, warning that excessive regulation threatens to smother German competitiveness.

The liberalization effort may focus most on Germany's industrial sectors, which produce the exports responsible for economic growth. But some say the proposed reorganization of retailing hours is a key indicator for the overall deregulation effort.

''It has developed into a symbol for much more important fields, such as telecommunications,'' Mr. Lambsdorff says.

Under current laws, a person with a full-time day job in Germany finds it almost impossible to shop during the week. Stores are required to close at 6:30 p.m. on weeknights, except on Thursdays, when they can remain open until 8:30 p.m. On Saturdays, stores close at 2:30 p.m. On the first Saturday of every month, and at Christmastime, stores can stay open a few hours longer.

Several proposals are being floated to introduce more flexible shopping hours. The most radical would scrap all restrictions, paving the way for the 24-hour store. Another would retain the rule mandating that stores be open for only 68.5 hours per week, but allow owners to establish their own daily hours.

Economic projections don't favor the status quo. Sales dipped slightly in 1994, and tax increases this year are expected to cut the purchasing power of Germans by about $27.5 billion. Faced with such bleak sales prospects, several department-store chains are supporting deregulation. Still, some proposals that would encourage consumption don't really appeal to small businessmen like Mr. Kalkmann.

''People are afraid of changing, even if the current situation isn't so good,'' he says. Up to 90 percent of shopkeepers oppose changing existing laws, according to the Association of German Retailers.

Kalkmann and others insist small business can't afford to pay the overtime necessary to maintain longer hours. At present about 60 percent of a retailer's costs go to paying personnel salaries and benefits. Thus, lengthening hours could force many neighborhood shops out of business.

''The cake wouldn't get any bigger with longer hours,'' Kalkmann says. ''Liberalization would encourage concentration of business ownership, especially in the food sector.''

On the political side, deregulation momentum appears to be fading. The Free Democrats, who have often led the liberalization charge, have suffered a recent series of defeats in state elections, weakening the Kohl coalition's grip on power. Given the government's vulnerability, Chancellor Kohl is unlikely to press such a contentious issue as retailing deregulation.

If the Free Democrats persist in calling for relaxed shopping rules, they risk permanently alienating small-business owners, who are one of that party's core groups of supporters.

''It could finish off the Free Democrats,'' Kalkmann says of the shopping hours debate.

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