The German Retail Federation (HDE) has formally urged Chancellor Friedrich Merz (CDU) to reduce the electricity tax for all businesses and reaffirm a commitment to lowering payroll costs below 40 percent.
In a letter addressed to the Chancellor, reported by the Rheinische Post, the HDE criticized the planned exclusion of the retail sector and private households from the upcoming electricity tax reduction. The federation stated that this move sends a “fatal and unacceptable signal” representing a breach of a key commitment outlined in the coalition agreement.
The HDE argues that with average energy costs representing 3 to 4 percent of revenue, coupled with already slim profit margins of just 1 to 2 percent in some cases, these costs are unsustainable. The federation also highlighted the impact of the planned minimum wage increase in 2026, further straining the retail sector.
“This input cost from the economy must be accompanied by equally reliable policies that provide tangible relief” the HDE wrote. The organization is calling for decisive measures to increase net income from gross income and a clear commitment to maintaining payroll costs below the 40 percent threshold. The HDE emphasized the urgency of these measures given the current economic climate.