The German Retail Association (HDE) gave an outlook on the coming weeks at its annual Christmas press conference on Thursday. Overall, the industry organization is expecting a “largely stable Christmas business” despite “historically difficult framework conditions”. However, sales would only increase due to “increasing prices due to inflation”, admitted HDE Managing Director Stefan Genth in a statement.
Specifically, the HDE forecasts that sales in German retail will reach EUR 120.3 billion in the months of November and December. That would mean a nominal increase of 5.4 percent compared to the same period of the previous year, but in real terms – i.e. adjusted for the effects of price developments – a decrease of 4.0 percent. In the online business, sales in the Christmas business are expected to grow nominally by 1.4 percent to 21.2 billion euros, but will shrink by 4.5 percent in real terms.
Overall, the mood in the industry is not particularly good given the current framework conditions: 79 percent of retail businesses expected “Christmas business that is worse than before the corona pandemic,” explained the HDE, citing a survey. The companies surveyed fear above all the possible effects of the “sharp rising prices for energy and food” and the “poor consumer sentiment” on demand.
“There is a great deal of uncertainty among both companies and customers in view of the difficult situation with enormous increases in energy prices,” explained HDE General Manager Genth. “The high inflation and poor consumer sentiment are not actually a good sign for the Christmas business. Despite everything, customers are determined to invest in gifts.”
For the year 2022 as a whole, the association is now forecasting sales of 633.4 billion euros for the German retail trade. This would mean that revenues would increase by a nominal 7.5 percent compared to 2021 and decrease by 0.1 percent in real terms. According to this, annual sales in online trading are expected to shrink by 2.3 percent in nominal terms and by 7.2 percent in real terms to 84.7 billion euros.