Grocery retailers are increasingly complaining about supply problems: 80 percent reported delivery bottlenecks in June. After all, the Rewe boss sees a slight relaxation in the price dispute with the manufacturers.
The delivery bottlenecks in the German food retail trade worsened in June. According to a survey by the ifo Institute, 79.7 percent of retailers reported supply problems, after almost 66 percent in May.
“The trading companies are still in difficult negotiations with the manufacturers about prices and conditions for certain goods,” said Ifo expert Patrick Höppner. “Delivery stops by the manufacturers and the delisting of certain products by the trade are used as a means of pressure.”
According to the Rewe boss, manufacturers are asking less often price increases
The head of retail giant Rewe, Lionel Souque, recently reported a slight easing in the often bitter price dispute between retailers and the food industry. “The situation has calmed down for a few weeks,” the manager told Wirtschaftswoche yesterday. Because inflation is easing, manufacturers are now calling for price increases less frequently.
However: Souque is still not satisfied with the behavior of the manufacturers. Hardly any manufacturer is currently willing to pass on falling raw material costs in the form of price reductions. “It doesn’t work that way, it still needs ‘education’,” said the Rewe boss.
Souque reiterated his criticism of parts of the consumer goods industry. “Apparently, some international consumer goods companies have the feeling that they are not making enough returns in Germany.” Suddenly some suppliers wanted 30 percent more for their products. “If we and other grocers hadn’t negotiated so hard, food prices would have risen twice as much in the past few months,” said the Rewe boss.
Delivery problems in the entire industry subside
In the meantime, supply bottlenecks eased in the entire retail trade. 40.4 percent of companies reported problems, down from 41.3 percent in May. Clothing retailers in particular felt a significant relaxation: 18.9 percent of the companies surveyed were affected in June, after 27.2 percent in May. The situation has also improved noticeably at hardware stores and furniture stores.
Nevertheless, the situation in a number of sectors remains difficult. “Many retailers are feeling the reluctance of consumers to buy, and price-adjusted sales have recently fallen in many areas,” explained Höppner. The assessment of the business situation has deteriorated recently, and expectations also remain largely pessimistic.
Retail suffers from falling demand
High inflation has been causing the retail trade in Germany a lot of trouble for a long time. The companies are expecting their business to slow down more than previously assumed: their sales are likely to grow by three percent this year, as the German Retail Association (HDE) forecast this week. Adjusted for inflation (real), however, it is likely to fall by four percent. So far, the HDE had assumed a real minus of only three percent.
“The framework conditions remain difficult overall,” emphasized HDE President Alexander von Preen. “In particular, the still high inflation ensures that the industry does not really get going.” The difficult situation is documented by a survey of around 900 trading companies. Accordingly, 35 percent of them expect sales to decline in the second half of the year.