Due to the ongoing stress caused by the Covid 19 pandemic, the mood of German consumers has not been exactly rosy in recent months. According to the findings of the German Retail Association (HDE), the Russian attack on Ukraine and its consequences have dampened the buying mood even further. The HDE consumption barometer fell to “a new all-time low” in April, the industry organization said on Monday. The index, which is determined monthly, is based on a current survey of 1,600 people on consumption-related topics.
Corona “only plays a minor role” for consumers
The authors of the study explained that the “shaping factor” of the most recent mood picture was the war in Ukraine. The corona crisis, on the other hand, currently “only plays a minor role” for the consumers surveyed, despite the continued high number of cases.
Above all, the economic expectations were determined by the situation in Ukraine and the foreseeable economic consequences. The corresponding index collapsed compared to the previous month of March. “Only in the first corona wave in 2020 did the economic expectations show a lower level,” emphasized the market researchers. In view of the overall economic situation, individual income expectations also fell, especially since those surveyed feared a further increase in inflation. “Consumers therefore expect to have fewer financial resources available in the coming months,” explained the HDE.
Weak economic prospects and high inflation weigh on the propensity to buy
The pessimistic outlook had a serious impact on the mood to buy: According to the study authors, the index for the propensity to buy also fell to a “new all-time low”. At the same time, the respondents planned to save less in view of the expected income burdens.
In their conclusion, the market researchers emphasized the explosiveness of the current situation: “From a macroeconomic point of view, the war in Ukraine was and is a similarly drastic event as the spread of the corona virus two years ago,” they explained. “There is a great deal of uncertainty among consumers.” The prospects for the German retail sector are correspondingly bleak: “No impetus to consumption is to be expected in the next three months,” according to the HDE.