Fewer Supply Bottlenecks in German Retail
Fewer German retailers are affected by supply problems. The figure fell to 36.6% in July, down from 40.4% in June, finds the latest ifo Institute survey. Compared with the previous year, this proportion has roughly halved. “Despite more stable supply chains, the business environment remains tense for many retailers,” says ifo expert Patrick Höppner. “At the same time, the current period of economic weakness, combined with continued high inflation, is weighing on demand.”
In food and beverage retail, many companies remain affected by supply problems: 69.9% of businesses reported this in July, down from 79.7% in June. Among car dealerships, the figure was 53.4%; in June, this figure was 60.9%. In clothing, toy, and furniture retail, only just under 20.0% of businesses were affected.
For some retailers, the recent significant rise in interest rates has made the impact of higher financing costs on their business situation more noticeable. “In addition, in some lines of business, it has also become more difficult to obtain new loans in the first place. These problems have intensified in areas such as the retail of home textiles and bicycles as well as in mail-order and online retail,” Höppner says. This primarily affects areas that saw especially dynamic growth in demand during the pandemic years but were unable to sustain this growth.
