This is behind the sobering austerity of the Germans

This is behind the sobering austerity of the Germans

Retail in Germany showed a significant decline in sales of 2.7 percent in February, although consumer wages rose. This decline is statistical, but can also be attributed to other reasons. Germans are still suffering from high food prices, which is also reflected in the current statistics. Aldi and Lidl advertised low prices at Easter, evident in their advertising campaigns.

Although factors such as price shocks and the energy crisis were less present compared to the previous year, industry observers are surprised by the weak figures. A leap year affected consumer budgets, resulting in a decline in sales. The Bundesbank adjusts these figures, which further reinforces the negative result.

The retail sector is experiencing particular challenges due to the insolvencies of large companies such as the Signa Group, which is leading to advertising budget restrictions and deterring customers. Future sales procedures and branch closures are foreseeable in the industry. Despite a slight improvement in sentiment, the overall situation remains challenging.

Increases in the price of food have influenced price levels and pushed sales down to the level of the end of 2016. In addition, geopolitical uncertainties are causing consumers to be reluctant to make non-essential purchases. The effects of these circumstances are clearly noticeable, for example through the decline in the furniture and fashion sectors in February.