German Retailers Face Profit Squeeze as Economic Headwinds Mount

A survey of 600 retail corporations paints a bleak picture, with 42% of respondents reporting deteriorating conditions. Data indicates that nearly two-thirds of these firms saw their business environment worsen during the first six months of the year compared to the same period in 2025. Rising overheads, specifically in energy and purchasing, have left little room for profit, even as the industry struggles with stagnant consumer demand.

Despite these mounting pressures, the HDE maintains a forecast for 2% nominal sales growth this year, projecting total turnover to reach €697.4 billion. To reach these targets, the association is lobbying for structural reforms, explicitly demanding that non-wage labor costs be capped at 40%. Industry leaders warn that any further restrictions on mini-jobs could stifle recovery efforts, leaving the sector vulnerable to continued stagnation.