Retail

Business climate in German retail gloomy: ifo Institute

18 Mar '24

1 min read

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Insights

The ifo business climate in Germany's retail deteriorated in February for the third month in a row, the latest survey by the Leibniz Institute for Economic Research at the University of Munich found.
The economic environment is quite challenging for retailers as consumers hold back on shopping.
Inventory remains too high at many retailers due to weak demand.

The ifo business climate in Germany’s retail deteriorated in February for the third consecutive month, according to the latest survey by the Leibniz Institute for Economic Research at the University of Munich (ifo Institute).

The indicator for assessments of the current business situation fell to minus 18 points, down from minus 15.2 points in January.

Expectations improved only slightly, with the indicator remaining at the low level of minus 36.7 points.

“The economic environment remains very challenging for retailers,” said ifo expert Patrick Hoppner in a release. “Consumers are holding back on shopping, which is putting a strain on retailers’ businesses.”

Inventory remains too high at many retailers due to weak demand. In the coming months, clothing retailers in particular are planning to raise prices less frequently.

Fewer businesses are planning to hire new staff in the months ahead.

“In addition to the difficult demand situation, the faltering collective bargaining negotiations are also unsettling many retailers. This could further reduce their willingness to hire, even if the overall demand for skilled workers remains high,” Hoppner added.

Fibre2Fashion News Desk (DS)

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