Retailers across Germany are voicing concerns over a sluggish start to the crucial Christmas shopping season, according to a survey released Sunday by the German Retail Federation (HDE). While the period leading up to the first Advent saw some marginal improvement, the overall performance remains significantly below expectations, raising questions about the resilience of consumer spending amidst ongoing economic uncertainties.
The HDE, representing a broad spectrum of retailers, polled 300 companies, revealing a pervasive sense of dissatisfaction. Stefan Genth, CEO of the HDE, acknowledged a slight uptick in sales on Saturday, but cautioned that the season needs a significant boost if retailers are to meet projected targets. Over 60% reported weak business in the final week of November, with a mere 25% expressing any degree of satisfaction.
The primary culprit, according to the survey, is a marked decline in foot traffic, with 70% of businesses registering lower customer numbers compared to last year. This trend highlights a potential shift in consumer behaviour, possibly influenced by inflation, anxieties surrounding the cost of living crisis and a greater prevalence of online shopping. While certain sectors, including toy, watch & jewelry and electronics retailers, showed a slightly more positive outlook, the overall picture remains precarious.
Despite the current struggles, the HDE maintains a cautiously optimistic forecast for the November-December period, projecting total retail sales of €126.2 billion – a modest 1.5% increase year-on-year. However, achieving this target now appears contingent on a significant turnaround in the coming weeks, particularly given the reliance on traditionally strong Advent weekend sales. The underwhelming start prompts a deeper consideration of government policies aimed at bolstering consumer confidence and supporting brick-and-mortar businesses navigating an increasingly competitive marketplace. The data underscores the vulnerability of the German retail sector and warrants closer monitoring as the vital Christmas period unfolds.