Mood in German Retail Sector Significantly Deteriorates

• German retail sentiment sharply declined in July, with retailers particularly pessimistic about their current situation.
• The Ifo Institute in Munich reported that the retail sentiment index dropped to -25.4 points in July from -19.5 points in June.
• This decline indicates a growing prevalence of pessimism among retailers.
• Expectations for the coming months also worsened, with no significant improvement expected in the second half of the year.
• 54.1% of retailers reported weak demand in the second quarter, while 46.2% cited a decrease in customer foot traffic in physical stores.

Munich, August 19 (FFN) – Sentiment in the German retail sector significantly worsened in July, with retailers expressing increased pessimism about their current situation, according to the Ifo Institute in Munich. The findings were reported by DPA.

The retail sentiment index fell to -25.4 points in July, down from -19.5 points in June. This deeper negative value suggests that pessimism among businesses is becoming more widespread.

In addition to the worsening sentiment regarding the current situation, business expectations in the sector for the coming months have also deteriorated. “This indicates that a significant turnaround in the retail sector towards improvement in the second half of the year is unlikely,” said Patrick Höppner, a retail market expert at Ifo.

In the second quarter of this year, 54.1% of surveyed retailers reported overall weak demand, and 46.2% pointed to a decline in customer numbers in physical stores. Additionally, more than 32% indicated problems with the availability of qualified employees, and over 6% of the respondents in the retail sector reported experiencing financial difficulties.

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