German retailers in cities and towns near Switzerland are losing millions of euros in profit, as a result of fewer people shopping across borders. To the surprise of German businesses, despite a favourable exchange rate between euros and francs, Swiss customers are still staying away.

Significantly fewer Swiss shoppers in German border towns

Before the COVID pandemic, the practice of people from Swiss cities and cantons visiting Germany for a cheap weekly shop was common to the point of being a stereotype. According to German newspaper Südkurier, in 2019, people from Switzerland brought in 2,5 billion euros a year in shopping revenue for businesses in the area around Konstanz.

After a significant decline in cross-border shopping during the COVID pandemic, officials from Germany have noted that numbers are yet to return to normal. Compared with 2019, 20 to 30 percent fewer “shopping tourists” from Switzerland cross the border every day, leaving a significant hole in the coffers of German entrepreneurs.

New VAT laws and inflation blamed for less business

Overall, authorities have blamed new VAT laws for the decline in shopping, with Swiss customers only able to import 50 euros worth of goods VAT free. According to Blick, the high rate of inflation in Germany is also making prices less appealing, especially with the increased cost of petrol and the allure of shopping on the internet.

However, according to Claudius Marx, manager of the Bodensee Chamber of Commerce and Industry, there is hope on the horizon. "The signs would be ideal for the Swiss to come back," he said, noting that, despite cost of living increases, people in Switzerland still have far more purchasing power than residents in Germany. What's more, he noted that drivers in Switzerland can get around the high fuel costs involved in shopping across the border by filling up the tank in the federal republic.