58 Business The EconomistNovember 21st 2020
2 ted, established by Nik Myftari, a refugee
from Kosovo, is a dating website. Novum,
created in 1988 by Nader Etmenan, who fled
Iran, has become one of Germany’s biggest
chains of hotels.
Immigrants to Germany (like Mr Sahin)
or those with at least one parent who was
born abroad (like Ms Türeci) number
19.6m, representing 24% of the population.
A study from the Bertelsmann Foundation,
another think-tank, found that members
of this group own 773,000 businesses.
Of these, 469,000 are sole traders. The rest
are employers, mostly in construction, re-
tail and services. Their numbers are grow-
ing. By comparison, the number of other
Germans who own businesses declined by
275,000 in the period, to 3.2m.
“Germans are averse to self-employ-
ment,” says Armando Garcia-Schmidt of
the Bertelsmann Foundation. Many gradu-
ates prefer a safe civil-service career to the
vicissitudes of starting a business. The
booming labour market of the past decade
helped skilled and unskilled youngsters
land a decent job without trying.
Options for migrants tend to be more
limited. Some come from countries with
strong entrepreneurial traditions and tend
to pick successful entrepreneurs as role
models. Various studies show that explicit
or implicit discrimination makes the la-
bour market, even in good times, much
tougher for migrants. And many have qual-
ifications from their country of origin that
are not recognised in Germany, so creating
a business is their only chance to earn
more than the wage from a menial job.
Mr Garcia-Schmidt expects the labour
market to become more difficult for every-
one once the pandemic has abated and Ger-
many’s generous furlough schemes expire.
Covid-19 has made 2020 a terrible year for
founders of all stripes. As the country
emerges from the coronavirus recession,
more native Germans may opt for self-em-
ployment as an alternative to joblessness.
They can learn a thing or two from their mi-
grant neighbours. 7Gastgründer
Germany, startups per 10,000 working-age peopleSource:Kf WResearch20017515012510075225191817161514131211102009MigrantsTotal population H
ow have America’s retailers coped
with covid-19? “We’re still learning,”
declared John Furner, who runs Walmart’s
vast American operations, on November
17th, as the supermarket giant reported
third-quarter results. He is being too mod-
est. Walmart, as well as a handful of other
big firms such as Target, its smaller rival,
and Home Depot, a diy Goliath benefiting
from housebound home-improvers star-
ing at dingy walls and outdated kitchens,
are thriving.
Paul Lejuez of Citigroup, a bank, de-
scribed the three months to October as “an-
other stellar quarter” for Walmart. Total
global revenues increased by 5.2%, year on
year, to $135bn. If anything, international
sales, which grew by just 1.3%, dragged
down strong performance in America,
which accounts for the bulk of revenues;
Walmart has said it will sell most of its flag-
ging Japanese supermarkets. By contrast,
domestic comparable-store sales, a stan-
dard industry metric, rose by 6.4%. Home
Depot’s quarterly revenues shot up by 23%
compared with a year ago, to $33.5bn, keep-
ing up the previous quarter’s pace. Target’s
operating profit nearly doubled to $1.9bn.
Shining retail stars mask darkness else-
where in the industry. American shoppers
rebounded faster than elsewhere in the
rich world (see chart). But retail sales grew
by just 0.3% last month, compared with the
one before, the slowest in half a year. They
softened in most of the 13 categories
tracked. As investors swooned over Wal-
mart and Home Depot, Kohl’s, a middling
retail chain, reported falling revenues.
“The distinction between the haves and thehave-nots has gotten even sharper,” says
Simeon Gutman of Morgan Stanley, an in-
vestment bank.
Mr Gutman points to the successful
firms’ superior management of diverse,
global supply chains. This allows shoppers
to satisfy most of their retail needs in one
store—particularly important in a pan-
demic, when people are keen to limit their
outings. Walmart’s customers make fewer
trips to the store but spend more whenever
they do, he notes.
The star retailers’ biggest edge, though,
comes from e-commerce. Walmart in par-
ticular upped its e-game just in time to
benefit from a pandemic surge in online
shopping. A survey of American shoppers
by McKinsey, a consultancy, found that
kerbside pick-up has nearly doubled from
pre-covid levels, and in-store “click and
collect” sales have shot up by nearly 50%
from last year. Walmart’s digital sales leapt
by nearly 80% in the latest quarter, year on
year, to $10bn. That is still less than 8% of
revenues—but more than in the whole of
2016, according to Morgan Stanley. The
fast-approaching holiday shopping season
is likely to bring even more online sales
than usual, says Mr Gutman.
By doubling down on digital, Walmart is
taking on Amazon’s e-emporium. The tech
giant is not taking this lying down. On No-
vember 17th it launched its long-awaited
digital pharmacy. This threatens not just
chemists such as Walgreens and cvs but
also Walmart, which sells prescription
drugs in over 4,000 of its big-box stores.
When it comes to e-commerce, Mr Furner’s
humility is fully justified.^7NEW YORK
The pandemic is producing clear winners and losers among America’s retailersWalmartBeastly earnings
Bytes of BentonvilleSources:Nationalstatistics;Bloomberg;MorganStanley *Jan& Febcombinedduetolunarnewyearholiday †Feb-Oct100-10-20-30
2019 2020Retail sales,%changeona yearearlierJapanChina*European UnionUnited States6004002000
20†182016Walmart,revenues,$bn6004002000
20†182016OtherInternational US
OtherE-commerceBy platform By regionFinancial years beginning February