Poor consumer sentiment, poor sales: Retailers are drawing negative conclusions at the end of the Christmas business. “Unfortunately, business was significantly worse than in 2022 and went without much stimulus,” said Stefan Genth, general manager of the German Trade Association (HDE), to the German Press Agency.
Two thirds of retailers are dissatisfied and complain about worse sales than in the previous year, while only one in six say they are satisfied. This is the result of a nationwide survey conducted by the association among more than 350 companies. Although Christmas business was not good in 2022, Genth expects a price-adjusted decline of five to six percent. The HDE expects sales of around 120 billion euros in November and December 2023.
Massive consumer restraint dampens the annual results
Genth sees the main reason for the disappointing annual results in the massive consumer restraint. Recession, high inflation and wars had “caused great uncertainty among consumers and had a very negative impact on consumer behavior”. Retailers would also have had to contend with some difficulties due to rising energy costs and higher purchasing prices.
However, Genth also sees bright spots. The shopping Sundays were well received in large cities. Business in the sports retail sector was particularly good. “People are inclined to do something for themselves. This trend from the Corona period has now been confirmed again,” says Genth. Retailers in the clothing sector were less satisfied. The industry was unable to achieve the usual sales and particularly felt the uncertainty of the population.
Online business was also disappointing
Business on the Internet was also disappointing. According to the Federal Association of E-Commerce and Mail Order Germany (bevh), online retail was hardly able to benefit from the Christmas business. The trade association is nevertheless satisfied with the development: Genth sees a sideways movement at a high level. Sales are 40 percent higher than in 2019. Many smaller and medium-sized businesses have now discovered online business.
Despite the disappointing annual results, the retail sector is looking forward to 2024 with mutedly optimistic expectations. The labor market is having a stabilizing effect and inflation is falling significantly. “These are good conditions for people to become more confident and optimistic again and for consumer sentiment to improve,” says Genth. This could also increase the tendency to make higher-priced purchases again.
Nevertheless, retail will again have to contend with challenges in the new year. Genth points to the negative effects of the wars in Ukraine and the Middle East. In addition, many retailers are affected by delivery difficulties and a shortage of workers. There are therefore more than 100,000 vacant positions in retail. (dpa)