German Trade Association Urges Return to Factual Political Debate Amidst Negative Effects on Consumer Sentiment

With a view to the hectic political debates about a heating law or an industrial electricity price in recent weeks, the German Trade Association (HDE) is calling for a return to a factual debate. In view of the excitement and exaggerations in daily politics, the HDE fears negative effects on consumer sentiment, which is already battered.

“After several years of the pandemic and in view of the persistently high inflation, the uncertainty is already great. Consumer sentiment is a long way from reaching the pre-Corona level. Many people prefer to keep their money together, and consumers and retailers are clearly feeling the effects. In this situation, we need courage and confidence, and politicians must also make their contribution,” said HDE President Alexander von Preen. It is counterproductive to create additional uncertainty with public back and forth. Clear announcements and reliable politics are now needed.

“Consumption is, to a large degree, psychology. If the retail trade is to become a pillar of the domestic economy again, then we need more predictability and clearly defined ways out of the crisis,” von Preen continued. The citizens should therefore now get clarity as quickly as possible about upcoming burdens, for example when replacing the heating system. The HDE President also sees retail companies negatively affected by the federal government’s zigzag course. There is always talk of reducing bureaucracy, but at the same time there is still great uncertainty about the new requirements, which are often difficult to meet, due to the supply chain law at federal level, which is to apply to all companies with 1000 or more employees from 2024.

The situation is even more challenging because Germany was too hasty at the time and now there will also be an additional regulation at European level. In the end, a situation arises in which there are two different regulations with inconsistent requirements. “In this situation, which is economically very challenging for many, retail companies need more breathing space and not more and more new and bureaucratic requirements. The promises of a reduction in bureaucracy must be quickly followed by action,” said von Preen. In addition, the HDE President warns against the unilateral introduction of an industrial electricity price. It is incomprehensible why the retail trade, which is also suffering from the high energy prices, should not benefit here. The industry is in a difficult situation. In contrast to industry, trading companies cannot simply change location, but are dependent on competitive and economically viable framework conditions in the country. Affordable electricity and energy prices are an important building block.

The German Trade Association assumes that 9,000 shops will have to close their doors this year. According to the HDE forecast, retail sales in Germany will fall by three percent in real terms in 2023 compared to the previous year.