Retailer Sentiment in Germany Slightly Worse in the Holiday Season
The ifo Business Climate in Germany’s retail sector fell slightly in December. In the current holiday shopping season, the indicator fell to -23.0 points, down from -22.2 points* in November. Retailers assess their current situation as somewhat worse than in November. Business expectations for the coming months also declined slightly. “2024 was very challenging for the retail sector. The overall economic environment is likely to remain difficult in 2025, even through many retailers are hoping for an improvement in consumer sentiment,” says ifo expert Patrick Höppner.
The business climate in the retail trade for consumer electronics, electrical goods and electronic household appliances improved in December. This same also applies to food retail. On the other hand, sentiment among furniture and furnishing stores, DIY stores and bicycle stores has deteriorated.
Although the business climate in the retail sector improved temporarily, particularly in the first half of 2024, things went downhill in the second half of the year. “In addition to weakening demand, the shortage of skilled workers remained a pressing problem for many retailers in 2024,” says Höppner. The signs for 2025 are mixed: Rising disposable income could provide positive impetus. Economic policy uncertainty, on the other hand, is continuing to weigh on both retailers and consumers.
Source: ifo Institute
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