Business Situation in German Retail Deteriorates
Companies in most retail segments in Germany assess their business situation as worse. “Expectations for the coming months also remain cautious. The further cooling of the economy is having an impact on retailers, who have also recently had to cope with weakening consumer demand,” says ifo expert Patrick Höppner.
On the other hand, there have been improvements in issues with supply. In the retail sector overall, fewer and fewer companies are being affected by supply difficulties. In August, the figure was 34.8%, down from 36.6% in July. This proportion has been falling steadily over the course of the year.
In the food and beverage sector, however, many retailers are still feeling the effects of supply problems, at least in some places or for certain products. A full 73.2% of businesses reported this in August, up from 69.9% in July. “Supply problems due to disputes between manufacturers and distributors over prices and terms seem to be declining,” Höppner says. “In contrast, stalled collective bargaining recently led to more strikes in some retailers’ logistics chains and thus also to supply problems.” Among car dealerships, more than half were still affected by bottlenecks in August. For computers and software, electrical household appliances, and consumer electronics, the share was still over one-quarter in each case.
Due to the gloomy business situation in the retail sector, companies in some segments have also cut back on employment. The shortage of skilled workers is no longer as big a problem in most segments as it was recently. Overall, 35.4% of retailers reported problems recruiting skilled workers in the third quarter, down from 36.7% in the second quarter. The issue remains particularly pronounced in clothing retail and in food and beverage retail.
