Editor’s Note
**Editor’s Note:** This article examines the multifaceted challenges facing German retail, from geopolitical tensions to the climate crisis, and their impact on consumer sentiment. HDE President Alexander von Preen highlights the psychological nature of consumption amid current uncertainties.
The economic framework conditions are far from favorable: the war in Ukraine, conflicts in the Middle East, economic uncertainties, and the climate crisis are shaping German consumer behavior. HDE President Alexander von Preen explains:
These uncertainties lead many people to hold onto their money. Nevertheless, the average German plans to spend 297 euros on Christmas gifts—two euros more than the previous year.
Despite general skepticism, the jewelry and watch industry remains optimistic. According to an HDE survey, 53% of non-food retailers expect a worse Christmas business, but companies offering particularly gift-friendly products such as watches, jewelry, toys, or sporting goods are more positive. These product categories have the potential to excite consumers even in these difficult times. Notably, the jewelry and watch industry generates 22% of its total annual sales in November and December alone—a significant figure highlighting the importance of these months for revenue.
Another emerging trend is the stagnation of online retail. While Christmas sales online are expected to rise by 1.4% compared to 2023, this sector will no longer be the growth driver it once was. Online retail sales are projected to reach 21.5 billion euros, with a two percent increase forecast for the full year.
To address these challenges, the HDE calls on politicians to reduce bureaucracy and suspend new bureaucratic measures. Additionally, tax rates should be lowered and the electricity tax abolished for everyone. In particular, politicians are urged to improve regulation of online giants—Temu and Co.—as a fair competitive environment is essential to strengthen retail locations in city centers and build more trust in the power of the market.
Although private consumption is forecast to see significantly weaker developments in 2024, surveys show that gifts in the watches and jewelry category remain in demand. According to statistics, the pre-Christmas season begins for 72% of buyers as early as November and December.
Therefore, do not bury your head in the sand, but actively participate in the market. Be present, develop customer loyalty through positive experiences in specialty stores to turn them into regular customers, and thus achieve the forecast 1.3% sales increase over the previous year, carrying it into the next year.