Which raw materials are currently in short supply and represent a challenge for Leifheit AG?
Virtually all relevant raw materials have become scarce. The year 2022 will be more difficult than ever for large parts of the nonfood industry. As a result of the Covid pandemic and the Ukraine war, prices of raw materials such as steel and plastics, as well as those of electricity and transport, have multiplied drastically enough to cause serious impact and not all suppliers will be able to maintain business with retailers reliably. Leifheit AG will also be affected by this. However, we will certainly be able to continue to supply our retail customers with goods better than other suppliers thanks to our production in Germany and other locations in the European Union.
Should consumers prepare for large price jumps? Could a price increase currently have a negative impact on purchasing behavior?
Yes and yes. In my estimation, cost increases are reaching a level that we have not seen in the European Union for decades. This will force consumers to be more frugal with avoidable costs such as vacations, restaurant visits, fashion, etc. Fortunately, the Leifheit and Soehnle product groups are relatively essential. For example, if an ironing board breaks in a household, that household is likely to buy a new ironing board, although the price of ironing boards is of course very much influenced by the price of, for example, steel, electricity and transport.
Speaking of inflation, what do you think needs to happen to effectively stop inflation?
In my personal opinion, the government will soon realize that German companies can only retain jobs and create new ones if they can produce at competitive costs – especially for energy. France is building nuclear power plants, Germany is getting out of nuclear power and fossil energies at the same time. The government should not see German companies as cows to be milked and gamed, but as the engines of technological progress in climate protection and as creators and financiers of jobs and tax revenues. We will only be able to maintain our prosperity, our social system, our social progress and our security if the government finally improves the conditions for business location – for example in terms of energy costs, taxes and the reduction of bureaucracy complexity.
Would you like to learn more about Henner Rinsche? You can find out more about the Leifheit CEO in his vita at liv.biz.