Business confidence within Germany’s retail sector experienced a slight decline in August, falling to -24.0 points according to the latest data released Friday by the Ifo Institute. This marks the third consecutive monthly decrease since May, following a reading of -22.9 points in July.
Retailers assessed their current business situation with marginally increased caution. While expectations for the coming months saw a slight improvement, they remain at a subdued level. Ifo expert Patrick Höppner noted that “the economic recovery is not yet gaining traction and a shift in sentiment is still lacking within the retail sector.
The business climate deteriorated slightly in furniture and apparel retail. However, a modest improvement was recorded in grocery retail. Across many branches of the industry, companies are continuing to demonstrate caution regarding expectations for the remainder of the year. “Although consumer spending is forecast to fare better this year than overall economic performance, many retailers do not anticipate any significant boosts to business in the near future” Höppner explained.
Price pressures within the retail sector have eased slightly. In July, retailers reported fewer instances of increasing prices compared to the previous month. They also anticipate fewer price increases in the months ahead. However, grocery retailers and furniture stores are planning more price increases in the coming months than the retail sector as a whole.