Withdrawing cash in the supermarket: popularity increasing, retailers under pressure

Withdrawing cash in the supermarket: popularity increasing, retailers under pressure

Withdrawing cash in supermarkets and other shops is becoming increasingly popular in Germany. This service-oriented approach allows customers to stock up on cash when shopping and save a trip to the ATM. Despite the positive response from consumers, the Cologne retail research institute EHI has concerns about the impact on retailers.

According to a study by EHI, more and more people are interested in cash withdrawals, but the actual proportion of cash payments is decreasing. If this trend continues, merchants could find it difficult to maintain service as they may need to purchase additional cash from utilities. The use of cash withdrawals has increased enormously, from 2.23 billion euros in 2019 to over 12.3 billion euros in 2023.

Trading is subject to fees that range between 0.1 and 0.2 percent of the paid out amount per transaction. In 2023, companies paid a total of 17.23 million euros to banks, an increase of 25.7 percent compared to the previous year. It is predicted that the amount will continue to increase due to high demand.

Experts predict that problems could arise if cash turnover falls below 25 percent. The critical cash ratio is considered to have been reached when less than a quarter of sales are transacted in cash. Despite these forecasts, large supermarket chains such as Rewe and drugstore chains such as Rossmann state that they are currently not planning any restrictions on cash withdrawals.

Dealers are currently paying out around 13.3 percent of the cash collected back to customers. The share of cash in total sales fell by two percentage points to 35.5 percent in 2023, and this trend is expected to continue until 2025, with only 25 percent of sales transacted in cash.