More than half of German retailers see their economic existence threatened by the increased energy costs.

This was the result of a survey by the German Retail Association (HDE) among 900 companies, which the FAZ has received in advance.

Around 22 percent of the companies surveyed see themselves in short-term existential difficulties in the next twelve months.

According to the association, energy costs in the industry have risen by almost 150 percent on average since the beginning of the year.

A fiasco

Stefanie Diemand

Editor in Business.

  • Follow I follow

"In view of the exploding energy costs, large parts of the non-food trade are already working at the limits of their profitability," says HDE General Manager Stefan Genth.

Many retail companies no longer see a way out.

"On the one hand, energy prices are rising enormously, on the other hand, most of them cannot simply pass the costs on to customers due to the tough competition," says von Genth.

More than 85 percent of retailers state that they are unable or only partially able to pass on the higher costs to their customers.

At the same time, the situation is likely to deteriorate further in the coming months given rising energy costs.

A quarter of retailers already state that they have difficulties extending existing contracts or signing new ones.

The industry was already in focus during the corona pandemic.

The consequences of that time are still affecting companies today, says Genth.

"After the two Corona years, which were hard for many retailers, there is a lack of financial reserves in many places to be able to absorb the energy price development in the short term." The currently poor consumer mood is also affecting the retail companies.

In September, the association's consumption barometer fell to a new all-time low.

Accordingly, retailers continue to anticipate consumer restraint.

The trade association is therefore demanding financial help from the state. "But so far it has been said that only energy-intensive companies should be supported," says Genth.

The retail sector has not yet been included in this category, even if the industry is one of the largest energy users in Germany, with 35 terawatt hours per year, according to the HDE.

"That would be a fiasco for retail, inner cities and the supply of the population."

Basically, the HDE forecasts an average decline in sales of 5 percent for the second half of the year compared to the previous year.