Fears are growing in the German retail industry that economic concerns and high energy prices could reduce the buying power of the German shoppers.
"The mood in the German retail market has cooled off," said the German Trade Association (HDE) Managing Director Stefan Genth, summing up the results of the association's survey of 1,300 shopkeepers.
It is not just the uncertainty over the euro crisis that's got the retail industry worried, he added. The rising energy prices also a big concern to the industry.
The high cost of electricity, heating oil and gasoline limit the purchasing budget of the buyer while creating creating higher operating costs for shops and negatively affecting the retail industry's bottom line.
And because competition is tough, many companies aren't able to fully pass on the increased costs to their customers, said Genth. Almost half of the companies interviewed for the survey complained about reduced profits in the first half of the year.
But the association's mood may be worse than the actual situation.
"The economic concerns seem to be currently larger than the actual economic risks," said Genth, adding that the country's low unemployment was a good basis for flourishing business in the coming months.
The German Trade Association anticipates a strong holiday shopping season, despite the economic downturn, he said.