A sharp drop in consumption and soaring energy costs are to blame, a trade group says
© Getty Images / Sergio Gonzalez / EyeEm
Germany’s retail industry is in jeopardy amid rising energy costs and a sharp decline in consumption, Der Spiegel reported on Monday, citing the German Retail Federation (HDE).
According to the organization’s forecasts, the first to face the risk of bankruptcy are smaller stores in city centers.
Retail turnover in Germany started to decrease in August. According to the Federal Statistical Office, sales in real terms fell by 1.3% compared to July, and by 4.3% versus August 2021. Food sales were down 1.7% from July and 3.1% year-on-year, reaching their lowest level since 2017. Textiles and shoes, household appliances, and construction supplies were other segments seeing a decline in sales.
An HDE spokesman said that the financial assistance promised by the German government to ease energy price spikes should be used to support retail stores.
“If this does not happen, we will face a disaster in many urban centers,” he said, as cited by the news outlet. However, he thinks the crisis can be avoided through investments and new creative ideas, although this would require cooperation between retailers and the authorities.
READ MORE:
German inflation hits post-reunification high
“In the current acute crisis, everything is becoming a little more difficult. The money pots will certainly not get fuller for the time being… If the concepts are to work, all stakeholders in the municipalities would have to work together – from the top of the town hall to city marketing, retail and gastronomy to cultural providers and citizens,” he stated.
For more stories on economy & finance visit RT’s business section
