retail trade
Less is being bought because of high inflation
According to a current forecast, inflation-adjusted retail sales are likely to fall a little more sharply this year than previously expected. photo
© Thomas Banneyer/dpa
According to a current forecast, inflation-adjusted retail sales are likely to fall a little more sharply this year than previously expected. Stationary trade is particularly hard hit.
HDE General Manager Stefan Genth referred to an association survey according to which a quarter of consumers in Germany are afraid of not getting by with the money. “Often they buy less, in many cases they switch to cheaper products,” says Genth. A total of 45 percent of the population said they would limit themselves in some way.
A look at the past shows how hard inflation is hitting retailers. The industry last recorded a real drop in sales during the financial crisis in 2009. At that time, however, the slump in sales of 3.4 percent adjusted for inflation was somewhat lower than expected for this year. There has not been a slump of this magnitude since at least the turn of the millennium.
According to the HDE forecast, the drop in consumption will hit brick-and-mortar retail particularly hard. Adjusted for inflation, sales here are even expected to shrink by five percent this year. That has consequences. The trade association assumes that around 9,000 shops will close their doors for good this year. That would be almost twice as many as in a “normal” year before the Corona crisis.
It looks a lot better online
Durable products in particular, such as furniture, construction and DIY supplies or bicycles, are currently being bought far less frequently than in previous years, reported HDE President Alexander von Preen.
In online trading, on the other hand, after a significant setback in 2022, there should at least be slight real growth of two percent again this year. In the coming years, the HDE then expects stronger growth in online trading.
The overall difficult situation in the industry is also reflected in the results of a current HDE survey of around 900 trading companies. Accordingly, 35 percent of retailers expect sales to decline in the second half of the year. For the year as a whole, just over every third retailer assumes that sales will increase compared to the previous year.
Less frequent delivery bottlenecks
According to the HDE survey, in addition to the purchasing reluctance of many consumers, the price development in purchasing and the high energy costs are also causing problems for the companies. The industry is also concerned about the shortage of skilled workers and the loss of attractiveness of inner cities.
But according to von Preen, there are also some bright spots for the industry. Inflation has apparently passed its peak and delivery bottlenecks have become rarer, said the industry insider. In the second half of the year, the HDE therefore anticipates at least stable or even better framework conditions for the retail trade in Germany.