Weak Start to the Year for German Retailers

The ifo Business Climate in Germany’s retail deteriorated in January. Both the current business situation and business expectations for the coming months clouded over. “Consumer restraint and a lack of skilled workers will likely continue to pose challenges for many retailers in 2024,” says ifo expert Patrick Höppner.

In January, 54.4% of retailers reported sluggish demand; 32.7% of businesses said they were struggling to attract skilled workers; and 20.5% were still affected by supply problems. “It looks as though the supply chain problems for products from Asia have gotten a little worse again in recent weeks due to geopolitical uncertainties along major global shipping routes. Overall, though, this effect has so far remained manageable,” Höppner says.

The situation has deteriorated in consumer electronics, clothing, and bicycle retail. Food retailers are also more pessimistic. Furniture stores continue to find themselves in a particularly gloomy environment. Assessments of the current situation improved for retailers of computers, software, and accessories, for toy retailers, and for drugstores and DIY stores.