A recent survey conducted by the German Retail Association (HDE) comprising 900 companies from all locations, sectors, and size categories has found that over half of retail companies in Germany feel their existence threatened.
Energy costs in the retail sector have risen by an average of almost 150% since the beginning of the year.
HDE Energy Costs Survey
Following responses from the survey, the HDE has called for the extension of the economic aid announced by the state to retail companies that can no longer cope with the energy price increases.
"Many retail companies no longer see a way out. On the one hand, energy prices are rising enormously, and on the other hand, most of them cannot simply pass on the costs to their customers due to fierce competition," said HDE CEO Stefan Genth.
In the HDE survey, 86% of respondents said they were unable to pass on rising energy costs to consumers.
A quarter of retailers report problems renewing existing energy contracts or signing new ones, with over 90% expecting higher energy costs on a permanent basis.
To combat this, more than three quarters are planning to step up energy-saving measures, the study noted.
Twenty-two percent of retail companies already see their existence in jeopardy in the short term (in the next twelve months) as a result of energy costs.
2022 Forecast
For the second half of the year, the HDE has forecast a real average decline in sales of 5% compared to the year before for the entire retail sector.
However, in select sectors, particularly inner-city non-food retail, sales are still up to 20% below the pre-crisis level from 2019.
"With a total of 35 terawatt hours per year, the retail sector is one of the largest energy users in Germany, but is not classified as energy-intensive. The steep rise in energy costs is turning all calculations upside down and putting many retail companies in situations that they cannot resolve on their own," Genth added.
© 2022 European Supermarket Magazine – your source for the latest retail news. Article by Conor Farrelly. Click subscribe to sign up to ESM: European Supermarket Magazine.
