Delivery problems and inflation: Retailers fear for Christmas sales

Status: 09/20/2022 11:25 a.m

The retail trade is worried about the replenishment of goods at the start of the Christmas business. More than three quarters of retailers complain about delivery problems. The situation for bicycles, household appliances and consumer electronics remains very tense.

Christmas is the busiest time of the year for retail. The consequences of the ongoing delivery problems for a large number of goods, which are likely to lead to disappointment among customers when shopping for Christmas, are all the more serious for retailers. In the August survey by the ifo Institute, 77.5 percent of retailers complained about corresponding delivery problems, in July it was 77.3 percent. “At the moment it doesn’t look like the problems will ease up in the run-up to Christmas,” said Klaus Wohlrabe, head of the ifo surveys.

The situation with toys is somewhat more relaxed

The situation at bicycle dealers remains very tense: 95.5 percent report delivery problems. Dealers of household appliances (95.5 percent) and consumer electronics (95.7 percent) report something similar. In the case of toy retailers, on the other hand, the situation has eased somewhat. After 100 percent complained about missing goods in July, it was 73.5 percent in August.

One reason for the problems is the faltering world trade, which is suffering from recurring lockdowns in the export world champion China. According to a study by the Kiel Institute for the World Economy (IfW), around eleven percent of all shipped goods are currently stuck.

Inflation is also depressing sentiment

However, according to Wohlrabe, it was not only the delivery bottlenecks that were depressing the mood in retail. “The high inflation rates are also dampening customers’ desire to shop.” In August, the inflation rate was 7.9 percent. With the expiry of the 9-euro ticket and the tank discount, a further boost can be expected in September, writes the Bundesbank in its monthly report.

“This will lead to renewed price increases for energy and services in the current month and increase the inflation rate accordingly.” The inflation rate should therefore “advance into the double-digit range in the coming months”.

Consumer researchers expect the Christmas business in German retail to start early this year in view of full inventories and dwindling purchasing power. “The pressure is particularly strong this year to be there in time,” said the managing director of the Institute for Retail Research (IFH Cologne), Kai Hudetz, recently to the Reuters news agency. “Because many retailers have full stocks due to general consumer restraint as a result of inflation and price increases.”

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