Retailers have been facing reduced sales and revenue, and the Christmas season only slightly improved the situation, said Franziska Berg of the German Retailers Association.
“In the last few months we have observed that consumer sentiment was at a low point, (and) it has continued to plummet, and now for Christmas business consumer sentiment has improved somewhat,” she said.
“Due to the energy crisis that we are currently experiencing, in connection with inflation, with high energy costs, all these are putting a strain on consumers. And retail companies are naturally feeling the effects of this because people are cautious about how they spend money,” she added.
According to a survey by market research firm NielsenIQ, people in Germany are exercising self-restraint due to unchecked inflation.
Around 44% of those surveyed said they avoid luxury products and 31% have reduced the number of times they eat out, preferring instead to treat themselves at home.
Berg said they have noticed a trend where consumers are swapping expensive brands for cheaper ones, opting to go for discount products.
“What we have also observed is that consumers shop differently than they did before the crisis, they are more conscious of the purchase price, they pay more attention to discounts, and also prefer to buy private-label brands or discount products,” she said.
Germany hit hard
In a survey commissioned by the German Consumers Organization, 61% of consumers said they buy cheaper groceries, 56% buy less clothing, and 56% also consume less overall.
While the eurozone is experiencing unprecedented inflation, Germany has been hit particularly hard.
Household energy bills in Germany, according to official data, have jumped over 50% when compared to the same time last year. Food price inflation currently stands at over 20%.
Most families and individuals are being forced to make tough choices in order to be able to pay their monthly bills.
Source: Anadolu Agency