As of: March 28, 2024, 9:59 a.m
By: Olivia Kowalak
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People in Germany are gripped by the consumer mood. Just in time for Easter, German citizens treat themselves to one or two chocolate bunnies - much to the delight of retailers.
After many years of reluctance to purchase on the part of German citizens, there is finally an upward trend in retail. As the
Ifo economic survey
on the business climate in retail presented on March 28th
showed, the indicator for assessing the business situation in the industry rose from -18.1 to -7.3 points. According to Ifo expert Patrick Höppner, the reason for this is the increasing consumer mood in Easter business: “The pessimism that prevailed recently is decreasing. “The Easter business has apparently been a bright spot for many retailers.”
The Easter business gives retailers in Germany warm feelings about the future. © Monika Skolimowska / dpa
Crisis in German retail: mass bankruptcies in stationary stores
Retail has been in turbulent times since the Corona pandemic. With the outbreak of inflation, many citizens have had to put their money on the back burner. The pandemic restrictions also changed people's purchasing behavior. According to a survey by the European Consumer Center, more than one in three people in other EU countries shopped online in 2023.
As
Allianz Trade
announced, the wave of bankruptcies hit the retail sector particularly hard in 2023. In the stationary fashion trade, big names such as Peek & Cloppenburg, Gerry Weber, Reno, Peter Hahn, Salamander, Görtz and Signa Sports United have folded. 92 fashion houses are said to have gone bankrupt.
Many retailers in this country have struggled with supply chain difficulties in recent years. Delayed border controls as a result of the pandemic, fluctuations in consumer behavior and the change in trade flows as a result of the war in Ukraine have led to bottlenecks in certain sectors. The recent unrest on the Red Sea caused by attacks by Houthi rebels on merchant ships continued to strain the situation around trade routes.
According to the business climate index, however, only 29.1 percent of retailers said they were affected by bottlenecks - in February it was 32.6 percent. “The uncertainties for maritime trade due to the crisis in the Red Sea therefore continue to be of minor importance for many retail supply chains,” explained the Ifo expert.
Easter mood when shopping: Positive prospects for price developments too
The mood has now visibly calmed down. According to the information evaluation, hardware and DIY stores, bicycle dealers and clothing retailers should assess the business situation much more positively. Despite the skyrocketing prices in the grocery store, more and more people are shopping freely again. Only the retail trade in computers and software and car dealers are seeing a slight deterioration.
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Customers can now look forward to positive price developments again. As the survey shows, only as few retailers were planning price increases as three years ago.
In February 2024, after adjusting for price increases, retail sales fell by 2.7 percent compared to the previous year. The food retail sector is particularly affected here. Consumers there experienced immense price increases despite falling inflation rates. The Easter business is of great importance for the sector: “Retailers can rely on the Easter business, especially when it comes to confectionery,” commented Höppner.