20,000 Fewer Jobs in Retail

Despite the much-touted economic recovery forecast for 2004, German retailers are looking ahead to a gloomy year with an estimated loss of some 20,000 jobs. The last few years of stagnating growth are to blame for the predicted 4,500 bankruptcies and several thousand more silent business closures expected for the upcoming year, the head of the retailer’s association, Holger Wenzel, said in the business daily Handelsblatt. "After the last two bad years many businesses are seriously weakened," he said, and until the planned tax reform actually kicks in consumer spending will not increase. But once that happens the retail sector should see a slight growth of 0.5 percent by the end of the year. Other market analysts, such as the service union ver.di, see the loosening of the rebate laws as a further detriment to jumpstarting growth. As long as retailers continue to "throw money out the window" by offering excessive price discounts, it’s no wonder the profit margin is so narrow, says ver.di’s trade expert. (based on wire reports)