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EUROPE STILL DIVIDED BY SUNDAY SHOPPING CONUNDRUM

By Mark Faithfull

The British do it, and the Swiss have voted to do more of it, but the Slovenians have decided they don’t really like it. Whether or not stores should open for business on Sunday is an issue that divides Europe. And despite anomalies at many borders and growing pressure to ease restrictions on Sunday commerce, the pro- and anti-Sunday-trading camps have dug in for the long haul.

Take Slovenia, one of Europe’s smaller but emerging retail markets. In January it firmly slammed the shop doors on most Sunday retailing as a highly restrictive trade act came into force, reversing a four-year-old measure that allowed stores larger than 2,150 square feet to open on 10 Sundays per year. Slovenia’s decision came after a referendum in which the public expressed its displeasure with large chains taking sales from smaller, independent retailers. Still, that decision could yet be challenged.

In nearby Croatia, the government overturned bans on Sunday trading in 2004 after sales-challenged retailers raised their voices in protest. The retailers claimed that almost 20 percent of sales came on a Sunday and that they were forced to lay staff off following the ban.

At the other end of the spectrum, the U.K. has led the pack in reforming Sunday trading laws. The government first lifted restrictions in 1994; since then, large-format retailers have been able to trade for six hours on Sundays, between 10 a.m. and 5 p.m. Stores smaller than 3,000 square feet can operate all day.

The U.K. Department for Trade and Industry has called for a review of existing policy, however, and independent retailers and major chains are producing contradictory research to validate their claims. A report from the Union of Shop, Distributive and Allied Workers, for example, claims there is multiparty opposition in Parliament to any change. The survey found that 78 percent of Parliament’s members are against abolishing all Sunday trading restrictions. “This poll shows the government will have a real fight on its hands trying to get any new legislation through Parliament,” said John Hannett, the union’s general secretary.

A separate survey for large-store lobbying group Deregulate, however, concluded that most small retailers would suffer no damage from an extension of Sunday trading hours. The Association of Convenience Stores weighed in, submitting its own evidence that reform would lead to a 3 percent loss in weekly sales on average for small retailers. “We hope that Ministers will resist being railroaded,” said David Rae, the association’s chief executive.

But Slovenia and the U.K. are not the only countries where the issue has stirred up conflict. In November Swiss voters took a baby step toward opening Europe’s most regulated retail market. Swiss law had limited Sunday shopping to stores in airports and the 25 largest train stations, and to items related to travel in stores of less than 750 square feet (1,300 square feet for grocery stores), forcing retailers in Zurich’s main station to close off parts of their shops on Sunday to comply.

The voters, however, narrowly approved legislation easing restrictions at the country’s main railway stations and airports, 50.6 percent to 49.4 percent. Retailers may not force employees to work Sunday shifts, and employees are banned from working longer than six consecutive days per week and more than 11 Sundays a year. They must also be compensated with 47 hours off after a Sunday shift.

“The Swiss market is going to be more liberalized, but it seems to be a process by small steps,” said David Bosshart, CEO of Gottlieb, Duttweiler Institut, a Zurich-based think tank. “Urban areas like Zurich, Basel and Geneva were pro, whereas all rural areas were against, together with labor unions and the Catholic Church.”

In Germany, Europe’s biggest market, convenience stores in railway stations and airports, and in some tourist spots, may open on Sunday. Other stores may open on four Sundays per year, typically to coincide with local events and fairs. Bakers can sell cookies on Sunday mornings, but not bread. Two years ago Germany’s highest court upheld that country’s Sunday selling restrictions, calling the principle of rest on Sundays and public holidays “sacrosanct,” although the government did extend Saturday evening hours of operation by four hours.

“That was a big change for German shoppers,” said Fadi Chebli, senior consultant for France and Germany at management consultancy Kurt Salmon Associates (KSA). “Even though stores are allowed to be open until 8 p.m., many close at 6 or 6:30, because there is such low consumer demand. There have been discussions, but Sunday trading is rather taboo. The trade unions are very resistant.”

But this year the waters have been muddied; Germany is playing host to the World Cup soccer tournament between June and July. Special measures, determined by the individual German states, will apply during this time. Bavaria, for example, will allow shops to open in Nuremberg and Munich only on those Sundays when matches are played there. Hessen, on the other hand, is allowing stores to open from 2 p.m. to 8 p.m. on Sundays during the tournament, but not on July 9, the day of the final match.

Despite the current climate in Germany, the pressure for further liberalization will come as shoppers break their traditional habits and begin to expect more-flexible hours, Chebli says. “But I don’t see anything changing in the next three years,” he said.

The Sunday shopping dichotomy is most obvious at national borders. Austria is a prime example, given that many residents can drive into neighboring Hungary to shop. The spending drain is a worry to retailers, and one poll suggests that two-thirds of Austrians favor more flexibility of shopping hours, including Sundays. In Vienna many shop owners have taken the law into their own hands despite the threat of administrative penalties.

In France, too, retailers are flouting the laws. Sunday trading is allowed for small retailers in tourist areas, but many out-of-town stores open anyway and take the financial penalties on the chin. “They pay the penalties, because they think it’s worth it,” said Jean Philippe Blasco, a senior manager at KSA. “From the public point of view, there is a desire for stores to be open. But in France this, like many things, is ruled by exception. Also, call centers are allowed to operate over the weekend, so the French are getting used to shopping, at least in this way, on Sundays.”

These rumblings notwithstanding, some doubt that Sunday shopping will ever be widely accepted in Europe. “Germany has historically had more restrictive Sunday opening times than France and Poland, and so Sunday shopper queues across Germany’s eastern and western borders have been busy for a long time,” said Michael Moriarty, vice president of consultant firm A.T. Kearney. “We don’t see any change in that in the next five years,” he said. “Holland deregulated because retail businesses were suffering from Dutch shoppers’ going elsewhere on Sunday, but there is no similar initiative in Germany, since there isn’t a lot of political appetite for it, and German religious institutions have been sharply against it.”

Indeed, European labor unions are mounting a robust defense. Global affiliates of international retail workers’ union UNI Commerce have signed a petition calling for a ban on Sunday trading. The initiative comes from the so-called Vienna Dialogue, a conglomerate of unions from Austria, Croatia, the Czech Republic, Germany, Hungary, Slovakia, Slovenia and other countries. “Sunday plays a special role in the cultural life and traditions of Europeans,” the unions said in their statement. “As a day of rest, Sunday has defined the rhythms of life for time immemorial.”