The new year started with a drop in sales for the retail trade in Germany. According to provisional results from the Federal Statistical Office, in January 2023 companies posted real (price-adjusted) 0.3 percent and nominal 0.7 percent less sales than in December 2022.
Compared to the same month last year, real revenues fell by 6.9 percent, as the Wiesbaden authority announced on Wednesday. Due to some significant price increases, however, this analysis resulted in a nominal increase in sales of 2.8 percent. Nevertheless, sales in January of the current year remained 0.6 percent below those of January 2020, the month before the outbreak of the corona pandemic in Germany.
Sharp increases in energy prices and persistently high inflation are reducing the purchasing power of consumers in Germany. People can afford less for one euro. That dampens private consumption.
“Many consumers recently had to tighten their belts. Although the most recent wage agreements show comparatively high increases, they are not sufficient to cushion the burden of increased inflation,” said Jörg Zeuner, chief economist at fund provider Union Investment. “All in all, consumption in Germany is suffering from a drop in purchasing power and there is no end in sight.”