According to the monthly economic survey by the Ifo Institute, one in six retail companies in Germany now fears for their existence. In April, 17.4 percent of companies assessed their situation as existentially threatened, more than ever before. This was announced by the Munich Economic Research Institute.
The main reason is therefore customers’ reluctance to buy; other factors include the growing market share of online retail and competition from low-cost suppliers from abroad.
In the other sectors – industry, construction, service providers and wholesale – the concerns are somewhat less great. More than seven percent are largely unanimous in their fear of continued existence. Across all sectors, companies cited a lack of orders and weak demand, rising operating and energy costs and bureaucracy as reasons.
It’s not just consumers who are saving, many companies are too
The ongoing crisis can also be seen in several service sectors: According to the Ifo survey, over a fifth (21.4 percent) of personnel agencies and temporary employment agencies see their existence threatened, and in advertising and market research the figure is over 14 percent. The survey results are in line with voices from business, according to which many large companies are hiring fewer temporary workers and have reduced their PR budgets.
According to Ifo, many companies are also reporting increasing liquidity bottlenecks because customers are saving or filing for bankruptcy. “The crisis is spreading along the supply chains,” said Ifo survey leader Klaus Wohlrabe. “If customers drop out or cancel orders, it hits suppliers and service providers with full force.” The economist expects the number of insolvencies to remain high in the coming months due to the uncertain global situation.
