Ifo’s Business Climate in Retail Slightly Dropped in December
According to the Ifo survey published on Friday, the business climate in retail slightly decreased in December.
The indicator fell to -23.0 points, following a decline of -22.2 points in November. Retailers evaluated their current situation as slightly worse than in November, and their business expectations for the coming months also decreased.
“For the retail sector, 2024 was very challenging. 2025 will likely remain a difficult economic environment, even if many retailers hope for a better consumer sentiment” said Ifo expert Patrick Höppner.
The business climate in retail electronics and electrical goods, as well as in food retail, improved in December. However, the mood in furniture and home goods stores, DIY stores, and bike shops worsened.
In the first half of 2024, the business climate in retail briefly improved, but then declined in the second half. “Apart from a weakening demand, 2024 was also marked by a persistent labor shortage for many retailers” Höppner said.
For 2025, the prospects are mixed: increasing disposable income could provide positive impulses, while economic uncertainties will continue to weigh on retailers and consumers alike.