Whether it’s a bike shop, furniture store or drugstore – the mood in German retail worsened in July. According to ifo, an upturn is unlikely.
The mood among German retailers continued to deteriorate in July. According to information from the Munich-based ifo Institute, the ifo Business Climate Index in retail sector fell to minus 25.4 points at the beginning of the second half of the year, after having been at minus 19.5 points in June. Retailers are therefore more cautious about their current business situation. Expectations for the coming months have also continued to deteriorate.
The bad mood is particularly evident among bicycle and fashion retailers as well as in the furniture industry. Drugstores and electronics stores also reported an “unfavorable development of their business.” “A significant revival of retail business in the second half of the year is therefore less likely,” said ifo researcher Patrick Höppner, summarizing the results of the survey.
54.1 percent of retailers reported insufficient demand for the second quarter from April to June 2024. 46.1 percent reported too few customers in their stores. In addition, almost a third (32.1 percent) reported a shortage of skilled workers, and 6.1 percent complained about financing difficulties. The mood in the retail sector had already deteriorated in June, after there had been some bright spots in the spring.
The ifo results are also not good news for the German economy as a whole, which shrank in the spring quarter due to falling investments. Many experts actually expect a consumption upturn in the second half of the year due to lower inflation and the noticeable increase in wages, as this has also strengthened consumers’ purchasing power.
About Ifo Institute
The Munich-based ifo Institute has been analyzing economic policy since 1949. Around two-thirds of its budget comes from public funding. The rest comes from other sources, such as policy consulting. The institute, whose best-known publications include the monthly business climate index, is organized as a registered association and has been headed by economist Clemens Fuest since 201
