The Ifo business climate index for retail in Germany saw a slight decrease in August, falling to -24.0 points from -22.9 points in July. This marks the third consecutive decline since May, according to data released Friday by the Ifo Institute.
Retailers reported a marginally more subdued assessment of their current business situation. Expectations for the coming months experienced a slight improvement, though remain at a relatively low level. “The economic recovery is not yet gaining traction. A shift in sentiment continues to be absent in the retail sector” explained Ifo expert Patrick Höppner.
The business climate worsened slightly in furniture and apparel retail, while grocery retailers saw modest improvements. Across many sectors, companies continue to express caution regarding expectations for the coming months and the remainder of the year. “Although consumer spending is projected to perform better this year than the overall economy, many retailers do not anticipate any significant business impetus in the near future” Höppner stated.
Price pressures within the retail sector have eased somewhat. In July, retailers reported fewer instances of price increases compared to the previous month. They also anticipate fewer price increases in the months ahead. However, grocery retailers and furniture stores plan more price increases in the coming months than the retail sector as a whole.
