According to ifo, the situation for German retailers deteriorated at the beginning of autumn. More than a third of all retailers complain about empty stores. At least expectations for the coming months have improved.
The business situation of German retailers deteriorated somewhat in September. According to a survey by the Munich Ifo Institute, the corresponding index fell from minus 7.2 points in August to minus 9.8 points. However, there is a small glimmer of hope: expectations for the coming months have improved slightly.
“The recently noticeable increases in income among many consumers are likely to further strengthen purchasing power,” said ifo expert Patrick Höppner. “Retailers should also benefit from this.”
Complaints about empty stores
The situation varies greatly in the individual sectors. Retailers with computers and software as well as car dealers assess their current situation comparatively well. “Many other retailers of consumer goods, hardware stores and furniture and furnishing stores have recently complained about reluctant customers,” said Höppner. They therefore see their business situation as relatively poor.
Almost 82 percent of furniture and furnishing stores and almost 59 percent of hardware stores complained that customer frequency was too low. In contrast, the lack of customers was relevant for only around 16 percent of toy retailers and 18 percent of food and beverage retailers. Overall, 37.8 percent of retailers complained that stores were too empty.
Hope for a better buying mood
One reason for consumers’ reluctance is inflation, which is sapping their purchasing power. In September, however, the inflation rate was 4.5 percent, the lowest it has been since the start of the Russian war against Ukraine in February 2022.
Since significant wage increases were agreed in many sectors at the same time, purchasing power is likely to gradually increase again. That could increase German consumers’ purchasing mood, say economists.