During the Christmas season, retailers sometimes have to do what football coaches in particular do. If things don’t go well, they throw everything forward in the final phase. The fashion chain Peek & Cloppenburg launched a major advertising campaign on the last weekend of Advent – with up to 50 percent discounts on coats, jackets and sweaters. Otto, Galeria and others also offered discounts. In the last few meters, companies tried to save the Christmas business. Is that enough?
By the fourth Advent, only one in six retailers were satisfied with the progress so far, two thirds were dissatisfied. This is shown by a survey conducted by the German Trade Association (HDE) among 300 companies. The traditionally highest-sales week before the fourth Advent also fell short of expectations. According to HDE managing director Stefan Genth, the balance sheet so far has been weak. “We haven’t experienced anything like this in recent years.”
Falling demand
How willing were consumers to spend this Christmas season? A YouGov survey conducted on December 22nd shows: 30 percent spent less money on gifts, Christmas markets, food, trees and calendars than in 2024, 16 percent more and 44 percent the same as last year. 10 percent did not provide any information.
According to Rolf Bürkl, the propensity to save rose this month to its highest level since the financial and economic crisis of 2008. “That severely affected Christmas business this year,” says the consumer expert from the Nuremberg Institute for Market Decisions. The reason for this is increasing uncertainty, for example due to rising fears of inflation. Although discounts were advertised in many places, many people perceive the general costs around Christmas this year to be significantly or slightly more expensive than in 2024. Two thirds said this in a YouGov survey.
The situation with Christmas confectionery is emblematic. The demand for pastries such as speculoos and gingerbread, stollen or chocolate Santa Clauses was significantly lower this time than in 2024. According to market researcher NIQ, the number of units sold was around 15 percent lower by the beginning of December. The increased prices deterred consumers; packages cost on average around 12 percent more than in the previous year. More than two thirds of the goods were bought on special offers; in 2024 the proportion was still around half.
Competition from Temu and Shein
There was a lot going on in the German pedestrian zones in November and December – more than in the previous year, as data from NIQ shows. The number of visitors in 283 measured inner city locations rose by more than ten percent to 507 million. Friedrichstrasse and Alexanderplatz in Berlin were the most visited.
This was not noticeable for the retail sector, says HDE managing director Genth. More frequented city centers did not automatically lead to a lively Christmas business. The Christmas markets enjoyed a good response in many places. However, according to the HDE, over 70 percent of companies reported worse visitor numbers compared to the previous year.
The originally Chinese shopping portals Temu, Shein and AliExpress also caused frustration, as they took away considerable sales from retailers. According to a YouGov survey, one in five consumers in Germany bought Christmas presents there. The trade association estimates that Temu and Shein achieve sales of up to one billion euros in this country in November and December.
Where people save and where they don’t
The fashion trade is particularly affected by this. “We are definitely below last year,” says Axel Augustin, managing director of the BTE industry association. Last year the industry benefited from the onset of winter in November. “That created demand purchases because people needed warm jackets.” This time there was no weather effect.
Douglas also felt the reluctance to buy. In the important final quarter, business suffered because customers paid more attention to prices and the discount pressure was high, the perfumery chain recently reported.
But savings are not made equally everywhere. “When traveling, citizens in Germany are currently willing to spend money to escape from everyday life and spend time together in these uncertain times,” says HDE Managing Director Genth. The increased ticket prices would obviously be accepted.
What presents are under the Christmas tree?
In some sectors, business was better. According to the trade association, vouchers and toys were once again among the most popular gifts. According to Genth, books, watches and jewelry were also in demand. According to NIQ information, technical consumer goods also recorded great demand. Robot vacuum cleaners (+24 percent), hot air fryers (+15 percent), desktop PCs (+18 percent) and laptops (+13 percent) sold significantly better than in the previous year. Online retail benefited particularly at the end of the year, boosted by the Black Friday discount campaign.
The Christmas business does not end on Christmas Eve. After the holidays, a short but important follow-up period begins, which gives retailers hope. Many customers use the days off between Christmas and New Year to shop, give out cash gifts and redeem vouchers. Often they don’t leave it at that, but add something on top. At least 14 percent of retailers stated in an HDE survey that the period after the holidays is the period with the highest sales in the Christmas business.
Retailers expect sales of 126.2 billion euros in November and December. This would correspond to an increase of 1.5 percent compared to the previous year. The association does not want to draw a final conclusion until January.