Consumers in Germany's Pessimistic Outlook for 2024
A recent survey reveals that the majority of Germans are pessimistic about the upcoming year. Conducted by management and technology consultancy, BearingPoint, the survey discovered that an astonishing 95% of the 1,200 consumers surveyed on the first Saturday of Advent anticipate a deterioration in Germany's overall economic situation in 2024.
Financial Concerns and Falling Consumer Confidence
Many individuals remain critical of their own household finances, with around a third (31.2%) of respondents aged 15 and over surveyed on December 2 expecting no improvement in this area. The survey also highlighted that approximately 40% anticipate their own financial situation to worsen.
Financial burdens, such as rising Energy and Food prices, have weighed heavily on consumers for months. Although the annual rate of inflation has showed a significant decrease, the majority of individuals are not entirely confident as data gathered via Worms University of Applied Sciences and IIHD trade institute revealed that 97% of respondents expect consumer prices to increase in 2024, with around 46% expecting a more severe increase than what has been experienced recently.
Economists, however, predict an inflation rate reduction following an increase in December. In November, consumer prices in Germany were 3.2% higher compared to the same time last year, a decrease that brought inflation levels to their lowest since June 2021, with a rate of 2.4%.
Christmas Spending Trends
The impact of financial concerns can also be seen in this year's Christmas spending. Approximately 58% of participants in the BearingPoint survey enter the new year with hesitations, negative feelings, or mixed emotions. This hesitancy influences the Christmas season and the shopping habits of many, with only 13% viewing the festive period as an opportunity to be generous. Interestingly, almost 10% of those surveyed stated that they wanted to give more this Christmas for their last time as they fear their financial situations may deteriorate further in 2024.
A YouGov survey commissioned by the comparison portal Check24 revealed that 32% of German consumers plan on spending less on gifts, festive meals, and restaurant visits during Christmas compared to the previous year. A total of 64% of participants in this survey, which ran between November 29 to December 1, stated they would limit their Christmas spending to a maximum of €500. 42% of respondents aimed to spend up to €250.
Retail Sector Forecast
BearingPoint study author Kay Manke predicted that sales prospects appear positive initially for this year's Christmas business, but ongoing inflation may cause a price-adjusted decline in sales. According to his forecast, the retail sector in Germany is likely to generate nominal sales of €89 billion this Christmas, a 1.8% increase from the previous year. Adjusted for price increases, however, a decrease of 1.4% to €75.1 billion is expected.
Enrichment Data
Overall, the economic situation has caused Germans to reconsider their needs. Consumers are becoming more cautious in their spending habits, particularly in light of economic uncertainty and inflation. Despite this, certain spending categories, such as medications, groceries, and pet supplies, have seen growth. Online fashion spending has remained relatively stable, while online electronics sales decreased. E-commerce experienced a resurgence in 2024, with online product spending reaching €80.6 billion, reflecting the sector's improved consumer sentiment and savings. The market share of online marketplaces, including Amazon, also increased. However, the retail sector faces uncertainties for the upcoming years due to various factors, including general elections and geopolitical tensions.
