Christmas 2024: Rising prices make gifts a challenge!

Christmas 2024: Rising prices make gifts a challenge!

Amid the festive lights and Christmas anticipation, many Germans are facing financial challenges that impact their gift spending. A survey by the German Trade Association shows that despite a positive willingness to shop, the economic situation discourages many people. While, according to a survey, Germans want to spend an average of 297 euros on Christmas presents - over two euros more than last year - retailers agree about the uncertainty in the industry schwaebische.de reported. In a survey, 53 percent of retailers said they expected worse Christmas business. The reasons for this are ongoing inflation, geopolitical conflicts and the associated economic uncertainty, which are causing many people to become more frugal when buying gifts.

Growing variety of gift spending

However, for the first time since 2019, Germans plan to spend more on Christmas presents, as the EY consumer study shows. Compared to the previous year, the budget is expected to increase to 265 euros per capita, which corresponds to an increase of six percent. Those surveyed tend to give away money and vouchers, but toys and food are also very popular. “Especially in difficult times, many people want to do something good for themselves and their loved ones,” explains Michael Renz from EY world.de quoted. Despite this positive outlook, the trend is toward online purchases, with it estimated that “over 50 percent of gifts are purchased online,” putting pressure on brick-and-mortar retailers.

Retailers are faced with the challenge of stagnating sales as the popular Black Friday discounts result in high short-term sales but low profit margins. The following sales weeks often show a decline in sales, while in the run-up to the festival many customers have already purchased their gifts. This development increases uncertainty among retailers, who are forced to offer additional discounts to reduce inventory, ultimately threatening profitability.