The retail trade in Germany is increasingly being burdened by persistently high inflation. More and more consumers are changing their shopping behavior out of fear of financial bottlenecks.
The prospects for the German retail sector are deteriorating more than previously assumed. According to a new forecast by the German Retail Association (HDE) today, sales in the industry this year will be four percent below the previous year’s level, adjusted for inflation (in real terms). The HDE had previously assumed a real minus of three percent. According to the current forecast, however, sales are expected to increase nominally by three percent.
“The framework conditions remain difficult overall,” said HDE President Alexander von Preen in Berlin. “In particular, the still high inflation ensures that the industry does not really get going.”
High energy prices weigh on trade
The overall difficult situation is documented by a survey of around 900 trading companies. According to this, 35 percent of them expect sales to decline in the second half of the year. According to the survey, only one in three retailers assumes that sales will increase for the year as a whole compared to the previous year. Many of them also complain about high energy prices.
The HDE President therefore warns against unilateral measures by the federal government. “In view of the high energy costs, which the trading companies also have to bear, it shouldn’t just be easier for energy-intensive industry,” said von Preen. “An industrial electricity price is a mistake, there must be a market price that is acceptable in international comparison for all companies in Germany.”
Every fourth consumer fears financial bottlenecks
According to current data from the HDE consumption monitor, every fourth consumer is afraid of not getting by with the money. “Consumers are observing price changes and adjusting their shopping behavior,” said HDE CEO Stefan Genth. “Often they buy less, in many cases they switch to cheaper products.”
A total of 45 percent of the population state that they limit themselves in some way due to the high food expenditure. Genth emphasized that the retail trade has no interest in drastically rising prices: “Retail lives from private consumption. This suffers massively from high consumer prices and falling real incomes.”