High inflation continues to dampen consumers’ purchasing mood. German retailers once again reported lower sales in September. It was the fourth consecutive monthly decline.
German retailers also sold less in September. Compared to August, sales fell by 0.7 percent in nominal terms and by 0.8 percent in real terms (price-adjusted), as the Federal Statistical Office announced. Compared to September 2022, this is a decline in sales of nominally 0.6 percent and real 4.3 percent. “The difference between the nominal and real results reflects the increased price level in retail,” explained the Wiesbaden statisticians.
Ongoing inflation is also a key reason for consumer restraint. Even though prices have recently risen less quickly, they are still rising. In September, consumer prices rose by 4.5 percent compared to the same month last year and by 3.8 percent in October.
“Consumers stay safe”
“Consumers are very unsettled and prefer to remain in the dark. Consumption will continue to stand in the way of an economic recovery,” commented chief economist Alexander Krüger from Hauck Aufhäuser Lamp Privatbank.
Chief economist Thomas Gitzel from Liechtenstein’s VP Bank pointed out that retail sales had fallen for the fourth month in a row. “The weak retail sales are also reflected in weak or even negative overall economic growth.” The German economy shrank by 0.1 percent in the third quarter. Weak demand from private households also contributed significantly to this. “A rapid trend change is not foreseeable,” said Gitzel.
Cautious prospects for Christmas business
This also dampens hopes for the Christmas business. The market research companies GfK and NIM expect their consumer climate indicator to fall to its lowest level in 15 years in November. With the third decline in a row, hopes of a recovery in consumer sentiment this year must finally be buried, explained Rolf Bürkl, expert at the Nuremberg Institute for Market Decisions (NIM). This could also have an impact on Christmas shopping.