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 retail and private households from the upcoming electricity tax cut as a “fatal and unacceptable signal” representing a breach of a key promise made in the coalition agreement.
The HDE argues that with average energy costs representing 3 to 4 percent of revenue, yet profit margins often only reaching one to two percent, these expenses are becoming unsustainable. The federation also highlighted the anticipated increase in the minimum wage starting in 2026, which will further strain the retail sector.
“This input cost burden on businesses must be accompanied by a consistent policy aimed at providing tangible relief” the HDE stated. The organization is calling for decisive measures to increase net income from gross income and a clear commitment to maintaining payroll costs below 40 percent. The HDE emphasized the urgent need for action to support the economy amid current economic challenges.
