More Supply Bottlenecks in German Food Retail

The proportion of food retailers in Germany with supply problems has increased. In June, 79.7% reported bottlenecks, up from 65.8% in May, finds the latest ifo Institute survey. “Retailers are still in difficult negotiations with manufacturers on prices and conditions for certain goods. Supply freezes by manufacturers and the delisting of certain products by retailers are some of the ways the players are exerting pressure,” says ifo expert Patrick Höppner.

Overall, supply bottlenecks at retailers eased slightly in June, with 40.4% of the businesses surveyed reporting bottlenecks, down from 41.3% in May. This easing was more pronounced among clothing retailers: 18.9% were affected in June, down from 27.2% in the previous month. The situation has also improved noticeably at DIY stores and furniture stores.

Nevertheless, in many retail sectors, the business situation remains challenging. “Numerous retailers are feeling the effects of consumers’ reluctance to spend, and price-adjusted sales have recently declined in a large number of areas,” Höppner says. The retail segment’s assessment of its business situation has deteriorated lately, and its business expectations also remain predominantly pessimistic.