SHARE
COPY LINK

ECONOMY

Local bakeries left with crumbs in bread wars

The trip to the local bakery to pick up fresh German bread in the morning is likely become longer, as an industry association expects more than a third of all small bakeries will close by 2020.

Local bakeries left with crumbs in bread wars
Photo: DPA

Helmut Klemme, president of the Association for German Wholesale Bakeries said the number of bakeries will probably drop from 14,000 to about 8,000 over the next eight years.

The group said the small bakeries were losing business to the growing number of bakery departments in supermarkets and large discount stores.

Those departments are expected to increase from about 15,000 now to 25,000 in 2020, when about 60 percent of bread will be bought in grocery stores, Klemme said on Monday in Düsseldorf.

“The consumers are voting with their feet,” he said in a statement. “This development is clearly at the expense of the small bakeries.”

German consumers have been paying more for bread in traditional bakeries, where a kilo of bread costs about €3.88, Klemme said. In bakery departments of larger stores, that same weight costs approximately €2.42.

Klemme also predicted that prices would rise for consumers because of rising costs of commodities and higher energy prices.

Germany remains one of the top bread-consuming countries, with the average person eating 57 kilos of bread and rolls each year, according to the association.

DAPD/The Local/mbw

Member comments

Log in here to leave a comment.
Become a Member to leave a comment.

ECONOMY

German consumer prices set to rise steeply amid war in Ukraine

Russia's war in Ukraine is slowing down the economy and accelerating inflation in Germany, the Ifo Institute has claimed.

German consumer prices set to rise steeply amid war in Ukraine

According to the Munich-based economics institute, inflation is expected to rise from 5.1 to 6.1 percent in March. This would be the steepest rise in consumer prices since 1982.

Over the past few months, consumers in Germany have already had to battle with huge hikes in energy costs, fuel prices and increases in the price of other everyday commodities.

READ ALSO:

With Russia and Ukraine representing major suppliers of wheat and grain, further price rises in the food market are also expected, putting an additional strain on tight incomes. 

At the same time, the ongoing conflict is set to put a dampener on the country’s annual growth forecasts. 

“We only expect growth of between 2.2 and 3.1 percent this year,” Ifo’s head of economic research Timo Wollmershäuser said on Wednesday. 

Due to the increase in the cost of living, consumers in Germany could lose around €6 billion in purchasing power by the end of March alone.

With public life in Germany returning to normal and manufacturers’ order books filling up, a significant rebound in the economy was expected this year. 

But the war “is dampening the economy through significantly higher commodity prices, sanctions, increasing supply bottlenecks for raw materials and intermediate products as well as increased economic uncertainty”, Wollmershäuser said.

Because of the current uncertainly, the Ifo Institute calculated two separate forecasts for the upcoming year.

In the optimistic scenario, the price of oil falls gradually from the current €101 per barrel to €82 by the end of the year, and the price of natural gas falls in parallel.

In the pessimistic scenario, the oil price rises to €140 per barrel by May and only then falls to €122 by the end of the year.

Energy costs have a particularly strong impact on private consumer spending.

They could rise between 3.7 and 5 percent, depending on the developments in Ukraine, sanctions on Russia and the German government’s ability to source its energy. 

On Wednesday, German media reported that the government was in the process of thrashing out an additional set of measures designed to support consumers with their rising energy costs.

The hotly debated measures are expected to be finalised on Wednesday evening and could include increased subsidies, a mobility allowance, a fuel rebate and a child bonus for families. 

READ ALSO: KEY POINTS: Germany’s proposals for future energy price relief

In one piece of positive news, the number of unemployed people in Germany should fall to below 2.3 million, according to the Ifo Institute.

However, short-time work, known as Kurzarbeit in German, is likely to increase significantly in the pessimistic scenario.

SHOW COMMENTS