At the beginning of the year, the German Retail Association (HDE) sees no signs of a recovery in buying sentiment. The industry organization said on Monday that consumer sentiment had “noticeably” deteriorated, citing the current HDE consumption barometer for January.
The monthly index, which is based on a survey of 1,600 people on consumption-related topics, has slipped “to its lowest value since February 2024,” the association explained. “This means that the slight recovery in consumer sentiment from the previous year has almost completely disappeared.”
Those surveyed assessed the overall economic situation somewhat more negatively than in the previous month of December. They were significantly more pessimistic about the development of their own income situation. The HDE attributed this to “among other things the continued tense situation on the labor market”.
Political uncertainties are causing “increasing consumer reluctance”
In view of the current uncertainties, the association warned of “increasing consumer reluctance”. The consumers surveyed’s propensity to buy decreased compared to December. “There are signs of a shift from consuming to saving in the coming months,” explained the HDE. “With regard to private consumption, no major growth is in sight.”
The association cited the upcoming domestic and foreign policy changes as the main reason for consumers’ increasing need for security: “The federal election with the subsequent formation of a government as well as the effects of the change of power in the USA are causing uncertainty among consumers, which is also affecting consumption “, emphasized the HDE.