The ifo Business Climate in Germany's retail deteriorated in June, finds the latest ifo Institute surveys. The indicator fell to -19.5 points from -13.3* points in May. Retailers assessed their current business situation as poorer. Their expectations for the coming months have clouded over considerably.
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'Many retailers cannot be satisfied with how business trended in the first half of 2024,' says ifo expert Patrick Höppner. Although consumers' disposable incomes have risen, these increases were saved instead of being spent on additional consumption.
Clothing retailers, bicycle dealers and DIY stores in particular assessed their business situation as being far more negative than in May. Food retailers and car dealers were also less satisfied with how business went. Clothing retailers and bicycle dealers in particular have also significantly lowered their expectations for the coming months.
Many retailers are still left with high inventories. As a result, companies would rather reduce their orders for goods in the coming months than increase them. Retailers' employment expectations also remain subdued in view of restrained demand. 'Private consumption will probably be stronger in the second half of 2024 than in the first,' says Höppner. That will also likely buoy retailers' business.
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