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German retailers expect weak Christmas sales

Dec 15, 2023 Germany

German retailers are not expecting a boost from Christmas sales this year. As geopolitical concerns threaten to dampen consumer sentiment, weak demand continues to weigh on their businesses

According to the latest survey by the Ifo Economic Institute, sentiment among German retailers improved for the first time in three months in November, rising to minus 8.8 points from minus 13.5 in October. However, “despite the slightly improved mood among retailers, demand, which has been weak all year, remains a challenge even in the period of strong sales during the run-up to Christmas”, said Ifo retail expert Patrick Hoeppner (reuters.com).

In line with this, the German Retail Federation (HDE) recently warned that geopolitical concerns are set to damper consumer sentiment, leading to weaker sales during the Christmas season (shoeintelligence.com).

“The industry is feeling the economic effects of the war in Ukraine and the subsequent surge in inflation and, more recently, the further decline in buying momentum as a result of the Middle East conflict”, commented HDE’s President, Alexander von Preen. Retailers also continue to suffer from the continued high rents and energy prices they face.

For November and December, the trade association expects a nominal sales growth of 1.5 to 120.8 billion euros, as compared to the same period of 2022, due to price increases alone. In real terms, after considering the annual increase in consumer prices, sales will fall by 5.5% year-over-year. For the full year, including the food sector, the HDE reiterated its previous forecast of a 3% sales growth to about 650 billion euros, a decline of 4% after taking inflation into account.

Image Credits: Christian Wiediger on Unsplash

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