Investor Guide
2026-10-10 11:35

How did supermarkets in Germany come through the pandemic and the energy crisis?

Better than most retail property: food stores stayed open during the pandemic and their sales volume rose by 5.6% in 2020, while in 2022–2023 turnover grew on prices even as volumes fell. The main blow fell not on rent but on value: prime retail-park yields rose from 3.50% at the end of 2021 to 4.75% in September 2026 (BNP Paribas Real Estate). At unchanged rent, that means a loss of about a quarter of the price.

Food stores traded through the pandemic, and capital followed them

On 16 March 2020 the federal government and the states agreed that food retail, weekly markets and delivery services would stay open. In 2020 food sales volume rose by 5.6% and turnover by 8.4% (Eurostat).
Stores closed by official order could demand an adjustment of the rent. The Federal Court of Justice (BGH) recognised such a right for the tenant of a textile store closed from 19 March to 19 April 2020 (judgment of 12 January 2022, XII ZR 8/21). It granted no flat "discount", however, but weighed all the circumstances. The closures did not touch food stores.
Capital reacted quickly. The share of food and large-format stores in retail property investment rose from 39–46% in 2017–2019 to 57% in 2020 and 68% in 2021. Prime retail-park yields fell by 0.5 percentage points in 2021, to 3.50% (BNP Paribas Real Estate). In our experience, no anchor tenant in our clients' properties has defaulted or cut its rent, including during the pandemic (see Part 4 of the series German Prime Retail); this is no promise for the future.

The energy crisis hit retailers' margins above all

Exhibit 1. In 2022–2023 volumes fell, while turnover grew by 5–8% on prices
Change on the year, %
2020
2021
2022
2023
Food retail turnover
+8.4
+0.2
+5.2
+7.5
Sales volume in real terms
+5.6
−1.4
−4.7
−3.0
Prices of food and non-alcoholic beverages
—
+3.1
+12.5
+12.3
Consumer prices overall
—
+3.1
+6.9
+5.9
Sources: Eurostat — turnover and sales volume, calendar-adjusted; Destatis — prices.
Under a double net lease the tenant itself bears most operating costs (Part 10), so the jump in energy prices fell above all on retailers. Their margin after costs is thin anyway: only a few per cent, by the estimate of the Federal Cartel Office (Bundeskartellamt). A building's energy efficiency became an argument in purchases. In a BNP sample of 245 food and large-format stores, buildings built or modernised after 2010 need about 45% less primary energy than buildings from before 2000. Properties with the best energy certificates, BNP observes, are as a rule valued at a premium on purchase.
The landlord was only partly protected against inflation: indexation usually takes effect above a threshold and passes only part of the price rise on to the rent (Part 2). From 2020 to 2025 consumer prices rose by 21.9% (Destatis); a clause passing on 70% of the change would have produced about 15% (our calculation).

The blow fell on the price: rates lifted yields and cut values

The yield on ten-year German government bonds rose from −0.24% at the end of 2021 to 2.53% at the end of 2022 and 3.55% in October 2026 (Deutsche Bundesbank). Prime retail-park yields followed, reaching 4.20% by the end of 2022 and 4.75% by September 2026 (BNP Paribas Real Estate). For standalone supermarkets and discounters, the yield rose from 4.90% at the end of 2025 to 5.00%. At unchanged rent, a rise in yield from 3.50% to 4.75% lowers the value by about 26% (our calculation). The segment's share of retail property investment has fluctuated since: 44% in 2022, 66% in 2023, 33% in 2024 and 48% in 2025.

Implications for investors

1. Distinguish a resilient income from a resilient price. In our experience, the crises did not touch anchor tenants' rents, while rising rates cut the value of retail parks by about a quarter.
2. Check how the lease passes on inflation. Indexation with a threshold and 70% pass-through would have produced about 15% against a 21.9% rise in consumer prices.
3. Take the building's energy efficiency into account. The tenant bears the energy costs, but properties with the best certificates, BNP observes, sell at a premium.
What to check:
• the indexation clause: the threshold, the share passed on and the date of the last rent increase;
• the allocation of operating costs and the building's energy certificate;
• the 2022–2023 financial statements of the company that signed the lease;
• the price's sensitivity to yield: a rise from 5.0% to 5.5% at the same rent lowers the value by about 9%.
See also: Why are supermarkets considered a defensive asset?; How does rent indexation work in Germany?; What is a double net lease?; What happens if a supermarket tenant moves out?
Sources: Federal Government of Germany, guidelines to combat the coronavirus epidemic of 16 March 2020; BGH, judgment of 12 January 2022, XII ZR 8/21 (press release No. 4/2022); Eurostat, sts_trtu_a (retail trade in food, Germany), updated 10 October 2026; Destatis, consumer price index (2020 = 100), as of 10 September 2026; Deutsche Bundesbank, yield curve for federal securities; BNP Paribas Real Estate, German retail investment market reports for Q4 2021, Q4 2022, Q4 2025 and Q3 2026, and food-retail investment market report for Q4 2024 (energy certificates); Bundeskartellamt, press release of 28 September 2026; the series German Prime Retail, Parts 2, 4 and 10; Gordon Real Estate Group calculations.
Photo: Jan-Philipp Thiele / Unsplash
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