Germany Still Experiencing Food Supply Bottlenecks
Germany’s food retailers remain the hardest-hit by supply shortages, finds the latest ifo Institute survey. In February, 85.7 percent of the companies surveyed reported this problem, down from 95.6 percent in January. “Difficult negotiations between producers and retailers over food prices and conditions have recently been a major cause of gaps on shelves,” says ifo trade expert Patrick Höppner. “Food producers can use supply freezes as leverage in these negotiations, while retailers take this as an opportunity to temporarily pull products from certain producers.”
In February, 53.5 percent of the retailers surveyed were affected by supply bottlenecks, down from 57.4 percent in January.
“High food prices are currently having a major impact on purchasing behavior in food retail,” Höppner says. “Many consumers are more price sensitive and are more likely to split their purchases across multiple stores in search of good deals. As a result, food retail locations tend to have more foot traffic.” Only 17.7 percent of food retailers reported low customer traffic for the fourth quarter of 2022 – the lowest figure since 2020.
Bottlenecks in areas besides the food sector have fallen sharply, particularly in the bicycle business: only about one in four retailers is still affected. As recently as June 2022, every single bicycle dealer was reporting gaps in their product range. “Many sports and outdoor products saw strong demand driven by the pandemic up through 2022. That demand is receding again, so supply problems are easing again as well,” Höppner says.
