Consumption: Retailers expect even less sales in 2024 than expected

Because many customers are saving and consuming little, business for retailers in Germany is going even worse this year than expected. At the start of the important Christmas business, the German Retail Association (HDE) is correcting its forecast for 2024 significantly downwards. Only a nominal increase in sales of 1.3 percent compared to the previous year is expected, as the HDE explained. In real terms – i.e. adjusted for price increases – this corresponds to zero growth. Until recently, the association had forecast a nominal increase of 3.5 percent for this year.

Expectations are also cautious with regard to the Christmas business. According to a current HDE survey of almost 300 companies, 80 percent of retailers expect that many customers will be cautious about shopping in November and December. Only 30 percent assume that buying gifts will not suffer from the bad mood.

Prices are often too high according to customer perception

Although inflation has weakened noticeably recently, customers still feel that prices are still high in many cases. As in the previous year, the wars in Ukraine and the Middle East as well as economic uncertainty are also weighing on consumer sentiment. Consumption is to a large extent psychology, said HDE President Alexander von Preen. “Things aren’t looking really good here at the moment. That means people are more likely to hold on to their money.”

Adjusted for inflation, the HDE only expects “stable sales” at the previous year’s level in the important months of November and December. According to the survey, many companies in the consumer electronics, sporting goods, toys, watches and jewelry sectors expect Christmas business to be better than in 2023. Many fear that things will be even worse for household goods, furniture, shoes and leather goods, clothing and food.