Things are looking up a bit in German retail. The mood in the industry improved in April, as the Munich Ifo Institute announced. The Federal Statistical Office also reported increasing sales in March. Adjusted for price and seasonal effects, retailers sold 1.8 percent more than in February.
The sentiment surveyed by Ifo improved by three points to minus 14.5 in April. The current situation in particular was assessed more positively again and was only slightly negative. “The recent increases in real incomes are stimulating consumption,” said Ifo expert Patrick Höppner. “Consumers are spending more money again, which is also strengthening retail.” This also helps the economy: “The consumer-related sectors will probably provide support for the overall economy in 2024,” he expects.
According to the Ifo, the situation has recently improved particularly significantly at hardware stores, DIY stores and clothing retailers. In both cases, the proportion of companies complaining about low demand fell by more than 30 percentage points from the fourth quarter of 2023 to the first quarter of 2024.
At the same time, the shortage of skilled workers has eased somewhat. A third of retailers still have difficulty finding skilled workers. In the fourth quarter, however, it was still just under 43 percent, said the Munich economic researchers. The shortage is particularly high in the car trade as well as in the areas of electrical engineering and electronic household appliances.
According to the Federal Statistical Office, food business was particularly good in March. Compared to the same month last year, prices were up 4.1 percent after adjusting for prices. The authority recorded a decline of 1.7 percent for non-food items during this period. Non-food retail fell by 1.7 percent over the year.
