1 in 6 German retailers fear for survival: survey

Around a sixth of German retail outlets fear for their existence, according to a survey published on Monday by the Munich-based ifo economic research institute, reported dpa.

While 8.1% of companies in Germany see their survival at risk, "the situation is especially critical in retail, with 17.4% of companies seeing their survival under threat - a new high," ifo's April Business Survey found.

"The economic situation remains tense," said Klaus Wohlrabe, ifo's head of surveys. "Given the geopolitical uncertainty, insolvency figures are likely to remain at a high level in the coming months," he predicted.

The survey identified the dominant issue as consumer reluctance to spend, with growing online trade and cheap foreign discounters putting pressure on business.

Other sectors, including industry, construction, services and wholesale are less affected, with 7% to 8% of those surveyed fearing for their survival.

Ifo said that companies across those sectors pointed to a lack of orders and weak demand; rising operating and energy costs; and increasingly burdensome bureaucracy.

"The crisis is spreading along the supply chains. When customers leave or cancel orders, it hits suppliers and service providers with full force," Wohlrabe said.

The crisis can also be seen in several service sectors, with 21.4% of employment agencies and temping agencies worried. The figure was 14% for advertising and market research.

The results of the survey confirm sentiment from the economy, with many large companies hiring fewer temporary stay and cutting their public relations budgets.

Many companies were also reporting increasing liquidity bottlenecks because their customers were trying to save or going bankrupt, ifo said.