Editor’s Note
This article highlights the subdued consumer sentiment in Germany’s retail sector during the recent holiday season, attributed to global conflicts and domestic political uncertainties.
From the perspective of the German retail sector, the Christmas business has not been particularly successful. The weeks leading up to the holiday suffered significantly “under the general climate,” said Alexander von Preen, President of the German Retail Association (HDE).
People have held onto their money. This has led to many retailers having little joy during the Christmas business.
According to the HDE, the framework conditions for the crucial pre-Christmas period were more difficult than the previous year. The collapse of the traffic light coalition and the upcoming new election significantly impacted shopping behavior.
This has prevented many from going into town in high spirits and enjoying the Christmas market.
However, there are significant differences depending on the sector: The perfumery and cosmetics retail sector looks back on good Christmas business. Especially in challenging times, people want to treat themselves, the industry association explained upon request. Fragrances, in particular, were popular gifts.
Jewelers, jewelry, and watch specialty stores are also drawing a positive balance. For jewelry, sales are roughly at the level of previous years, for watches slightly below, says association managing director Joachim Dünkelmann. He is nevertheless satisfied, as 2022 and 2023 were exceptionally successful.
The weeks before Christmas Eve also went relatively well for book, household goods, and toy stores. “Probably, as always, savings are made last on children,” says Steffen Kahnt from the Toy Retail Association.
The association expects, adjusted for inflation, “at best” total revenue at the level of last year for the Christmas business. “I rather expect a small minus,” said von Preen. Originally, revenues of just over 121 billion euros were forecast for November and December – about the same as 2023. Final figures are not yet available.
The year-end business does not end with Christmas Eve. Many customers use the days off after the holidays for shopping. They spend money they received as Christmas gifts and redeem vouchers. For retailers, this has a positive side effect: Often, consumers don’t stop there but add something extra.