High inflation and the fear of skyrocketing heating costs make for an icy consumer climate in Germany in the middle of summer. Whether groceries or textiles – significantly less was bought in June than a year ago. Online trade was not spared from the reluctance to buy, as the Federal Statistical Office announced on Monday. And according to the German Retail Association (HDE), a rapid improvement is not in sight.
bad deals
In fact, the numbers are dramatic. In June, according to the Federal Statistical Office, sales in the German retail trade were 8.8 percent below the previous year’s level after adjustment for inflation – i.e. in real terms. “This is the largest decrease compared to the same month last year since the beginning of the time series in 1994,” the authority reported on Monday. Including price increases (nominal), however, sales fell by only 0.8 percent. The authority explained that the difference between the nominal and real results reflects the high price increases in the retail trade, which noticeably affected the consumer climate.
Bleak prospects
And a rapid improvement in the mood to buy is not to be expected. According to a recent HDE survey, people in Germany are more reluctant to make purchases and purchases than they have been in a long time. The association summarizes the result of its monthly consumer barometer that consumer sentiment is also expected to be weak in the next three months.
In view of the Ukraine war, inflation and great uncertainty about future developments, people are becoming increasingly cautious about their spending. “The consumer mood is in the basement,” said an HDE spokesman. In addition, their own income expectations have deteriorated compared to the previous month and there is therefore less scope for consumption activities or the expansion of savings. Only recently, a representative survey by the association showed that more than a quarter of the population (27 percent) is now very afraid of not getting by with the money.
Light and shadow in the textile trade
The reluctance to buy hit the textile trade particularly hard in June. Its sales were even 10.1 percent below the previous year’s level. However, the spokesman for the Textile Shoes Leather Goods (BTE) trade association, Axel Augustin, put the decline somewhat into perspective. June 2021 was very strong in terms of sales due to the catch-up effects after the month-long lockdown in the fashion trade. The bar for the industry was therefore set very high. Nevertheless, Augustin also admitted: “At the moment the consumer mood is relatively bad. People are also holding back when it comes to buying clothing.”
According to him, however, the differences in the industry are large. The situation is comparatively good in medium-sized fashion houses and specialist shops, whose more well-off customers hardly or not at all suffer from the current price increases. However, the more a retailer’s customers have to keep their money together, the greater the risk that they will not buy clothing. However, July and August are months with low sales in the fashion trade anyway. “September will be decisive. We’ll see how consumers react. Whether they’ll shy away if they have to buy a new coat without a discount,” he said.
In the food trade, attention is paid to the cent again
In the food trade, real sales in June were 7.2 percent below the previous year’s level. During the pandemic, supermarkets and discounters benefited from the fact that many events and visits to pubs were canceled and people often worked from home. In order to at least have a nice time at home, many people dig deeper into their pockets when shopping for groceries in 2020 and 2021. You treated yourself to something. This brought strong sales growth, especially to supermarkets.
But that’s over. Now we look at the cent again. According to data from the market researcher GfK, special offers are used more often, people shop more often at discounters and instead of branded items, the retail chains’ own brands are more often in the shopping cart. The market researchers observed that one or two purchases are simply avoided in order to save money.
End of the boom in online retail
And even internet trade, which had boomed during the corona pandemic, recently had to accept a slump in sales, according to the Federal Statistical Office. With a decline of 15.1 percent compared to June 2021, the sharpest drop within a year since 1994 was reported. For the deputy general manager of the e-commerce industry association bevh, Martin Groß-Albenhausen, this development is also a sign of the major role online trade now plays in everyday life. “As normal as e-commerce has become for people, it cannot escape the far-reaching disruption to the consumer climate, if not the economy as a whole,” Groß-Albenhausen said recently. (dpa)