Germany: Strongest decline in retail sales in two years

Business

Christmas lights in Erfurt. Credits: Alesia Kozik / Pexels

The reluctance of many consumers to buy is slowing down retail before the start of the important Christmas business.

In October, sales fell compared to September, both in nominal terms (-1.1 percent) and in price-adjusted terms (-1.5 percent). Adjusted for prices, the decline was the sharpest since autumn 2022. This means that the recovery from previous months has not continued.

While sales of food rose slightly in October after adjusting for price changes, revenue from other goods fell significantly. In online and mail order sales, sales after adjusting for price changes fell particularly sharply, by 2.4 percent.

Mixed Christmas business expected

The retail sector is suffering from the fact that many consumers are saving due to uncertainty about the weak economy - despite rising wages and a subsiding wave of inflation. Consumer researchers at the Nuremberg-based institutes GfK and NIM recently predicted subdued Christmas business. According to the Ifo Institute, business expectations in the retail sector for the next few months have recently remained almost unchanged at a low level.

Although the falling inflation rates have given people more breathing room when it comes to consumption, the reports of layoffs have also caused uncertainty, says Thomas Gitzel, chief economist at VP Bank. "If your job is in danger, the savings rate rises at the expense of consumer spending. It is still uncertain whether this will actually lead to an increase in private consumption." (dpa)

This article originally appeared on FashionUnited.DE, translated and edited to English.

It was translated using an AI tool called Gemini 1.5. .

Data

Germany