The buying mood of the Germans continues to decrease. In retail in particular, the drop in sales for October was higher than expected. This also clouds the view of the Christmas business: the majority of retailers are expecting a much worse course than in the previous year.
Inflation-plagued German consumers have left less money in retail outlets. According to the Federal Statistical Office, its turnover in October was 1.7 percent lower than in the previous month. Adjusted for inflation (real), it fell even more significantly by 2.8 percent. Economists had only expected a minus of 0.6 percent. Compared to October 2021, real sales even fell by 5.0 percent.
One reason for the reluctance to buy is probably the high inflation, which climbed to its highest level since 1951 at 10.4 percent in October. This gnaws at the purchasing power of consumers. In the summer quarter, real wages fell at a record pace of 5.7 percent.
“Because of the sense of inflation, consumers will keep their heads down,” said Alexander Krüger, chief economist at Hauck Aufhäuser Lampe Privatbank. The poor consumer mood – which, according to the GfK market researchers, fell to a record low in October – has already indicated poor sales figures. “They’re here now at the latest, and it shouldn’t get any better for the time being,” said Krüger.
The specialist food retail trade is suffering particularly badly: Its real turnover in October was 11.2 percent lower than in the previous month, as was the trade in furnishings, household appliances and building supplies. The Internet and mail order business, which has been booming for a long time, fell by 7.2 percent. Retailers are pessimistic about the current Christmas business. According to a survey for the German Retail Association (HDE), 70 percent expect the situation to be worse than in the previous year.
The majority of companies were dissatisfied with the development of sales on the first weekend in Advent. “The Christmas business is under the impact of the energy crisis,” said HDE CEO Stefan Genth. The HDE expects total sales of more than 120 billion euros for November and December. That would be a nominal plus of 5.4 percent over the previous year, but after deducting rising prices, a real minus of four percent.
