The German Retail Association (HDE) sees the mood of local consumers as continuing to “pandemic-related descent”. The propensity to buy reached an “all-time low” in February, the industry organization said on Monday, citing the current HDE consumption barometer. The index, which is based on a survey of 1,600 people on consumption-related topics, has fallen for the third month in a row, the association said.
According to the HDE consumption barometer for February, the consumers surveyed are more pessimistic about the general economic development than in the previous month, but are more confident about their own income. “Despite the general economic weakness, there are still no increasing worries about the job that would have a negative impact on income expectations due to the development of the labor market,” explained the authors of the study.
Despite the optimistic income expectations, the propensity to buy fell significantly compared to January. The market researchers justified the decline with the current pandemic development and seasonal effects: “After Christmas, there is no major reason for consumption,” they explained in a statement. “In addition, given the current high level of infection, it is unclear how the situation will actually look for consumers in the coming weeks. The consequence of this uncertainty is that fewer purchases are planned.”
In addition, the protective measures still in place in brick-and-mortar retail “impaired the shopping experience, so that consumers are initially refraining from larger purchases that can be postponed”. Despite these factors, the study authors conceded that the decline in the propensity to buy “was still surprising on this scale”.
In view of the current development, the HDE sees no signs of a change in mood in the coming weeks: “Due to the sharp drop in the propensity to buy, restrained development in private consumption can be expected in the first quarter. A trend reversal is only to be expected once the current corona wave has ended and the incidence of infection has subsided,” the association explained.