Border towns feel squeeze from trucks and shoppers

More Swiss shoppers are seeking German bargains Keystone

Swiss retailers continue to be dogged by consumers heading to neighbouring countries in search of better bargains in increasing numbers, according to the latest customs figures.

The weak euro contributed to a 1.7 per cent fall in turnover last year with Swiss shoppers spending some SFr5 billion ($5.1 billion) on cheaper goods across the borders. The number of consumers claiming back value added tax rose by up to 41 per cent in the first six months of this year in some key German border points.

Consumer tourism is on the rise throughout German border towns, according to the SonntagsZeitung newspaper.

The German border crossing at Singen, just across from canton Schaffhausen, saw VAT claims from Swiss shoppers rise from SFr2.94 million in the first half of 2011 to SFr4.15 million in the same period this year.

Another major cross-border shopping area, Lörrach, registered a 34 per cent increase in people submitting forms to claim back the 19 per cent tax on German bought goods.

Retailers complain that they have been hampered by the over-valued franc and restrictive opening hours that make Swiss shops even more uncompetitive in border regions. On top of that, clothing and sports goods retailers were hit by an unusually warm start to last winter.

Retailers dropped campaign

A survey by Credit Suisse and consultancy firm Fuhrer & Hotz earlier this year found that more than half of Swiss retailers expected profits to fall or stagnate this year. Some 38 per cent of respondents believed that sales would fail to grow.

The report also predicted that consumer tourism had probably reached its peak last year, but German customs figures seem to have dashed that optimism.

The strong franc, coupled with the arrival of discount retailers from Germany, have combined to bring down the cost of consumer goods in “high price island” Switzerland in recent years.

Research group BAK Basel predicts that prices may fall up to two per cent in 2012 alone.

A group of powerful Swiss retailers announced a campaign against consumer tourism earlier this year. But the plan was swiftly dropped as the parties failed to agree on how it would be perceived by consumers – including the fear that it could prove counterproductive.

Instead, many Swiss retailers have stepped up their strategy of cutting prices across a wide range of goods.