Retailing (Germany):
Worsened business situation

The business situation also worsened in retailing, both in the non-food sector and in food and beverages. With sluggish demand the enterprises again complained about excess inventories of unsold goods. With regard to the future business developments, they again expressed more confidence. Their order plans, however, tended to be more restrictive due to the enhanced inventory pressure. Price increases were more often successful, and further hikes appear to be possible in the future. Particularly the retailers of food and beverages reckon with perceptible price increases. The propensity to hire new staff has again weakened somewhat. Retailers in eastern Germany classified both their current business situation and their outlook for the coming half year more unfavourably than in May. Since inventory pressure made itself felt a little more strongly, the enterprises will be clearly more reserved in their order activity. Only scattered price hikes were successful, but in the coming months there seems to be more scope for raising prices.