Retail sales expected to rise by 3.5 percent in nominal terms
Despite the rather challenging situation in retail sales in many places, the Retail Association HDE is sticking to its sales forecast for 2024. The revenues are expected to increase nominally by 3.5%, and after adjusting for rising prices, by 1.0%. The Retail Association Germany announced this on Monday in Berlin.
The weak development of private consumption in the first months of the year leaves little room for growth for retailers. According to the HDE, nominal sales were therefore up by 2.3% in the first four months, but below the HDE forecast for the entire year. However, the association expects a significant increase in consumption in the course of the year.
An HDE survey of 800 companies shows the challenging environment. About half of the industry expects sales below the previous year's level in 2024. In the second half, only 22% of retailers plan for increasing revenues, 42% for stagnation, and 36% for a sales decline.
Facing the often challenging situation, the HDE estimates that around 5,000 shops will close this year. "We cannot get used to this negative development. Entire city centers will wither away," said HDE President Alexander von Preen. "To achieve a real revitalization of city centers, we need more investments in new businesses and the modernization of existing retail spaces." With a special program for tax deductions on investments in city centers, there could be an important impetus for the future of city centers.
The Retail Association HDE expects a lower than anticipated 1.0% increase in real sales after considering inflation, despite the 3.5% nominal increase in revenues predicted for 2024. Despite the challenging retail environment, as indicated by the HDE survey of 800 companies, showing that half of retailers anticipate lower sales in 2024, a substantial portion of the proceeds from retail trade might be redirected towards investments in new businesses and the modernization of existing retail spaces.
