The interest of German consumers to buy drops significantly.
Consumption has also dropped significantly in e-commerce, which has so far benefited from the COVID-19 pandemic.
Experts say that the lowest point of consumption has not yet been reached. German retailers ended the first half of the year with the biggest drop in sales in 28 years.
The reasons were high inflation, the pandemic crisis and the war in Ukraine. According to the Federal Statistics Office, the turnover of income from consumption fell in June to 8.8 percent, compared to a year ago.
“This is the biggest drop compared to the same month last year since 1994,” the Office said. In nominal terms – that is, not only in terms of prices – sales fell by only 0.8 percent.
“The difference between the nominal and real results reflects high increases in retail prices, which are clearly affecting consumer confidence,” the statisticians explained.
The situation may worsen Economists predict difficult times for the continuation of retail sales. “This was not the last bad news for consumers. Due to low consumer sentiment, consumption is likely to continue to decline in the future. Consumers are struggling with serious losses of real income.
Rising gas prices will reduce consumers’ willingness to spend even more this year. The bottom of consumption has not yet arrived,” said chief economist at Hauck Aufhäuser Lampe Privatbank AG, Alexander Krüger.
Even online trade in the red There was also a decrease in sales compared to last month: Real incomes decreased last month due to inflation by 1.6 percent.
This comes as a surprise: economists had expected a slight increase of 0.2 percent in the sector. Consumers spent 1.6 percent less on food. “The decrease is probably mainly due to the increase in food prices”, according to statisticians.
They were up almost 12 percent compared to June 2021.
The fact that people were going to restaurants more often may also have had a negative impact on food retail sales – sales in the catering trade were up 8.6 percent in May compared to the month past.
Trade in textiles, clothing, footwear and leather goods could not continue the year’s positive trend and was 5.4 percent lower in June than a month earlier. Online commerce, which has boomed during the pandemic, has seen a marked decline.
With a 15.1 percent decline compared to June 2021, the largest one-year decline since 1994 was reported.