Retailers expect decline in sales in Christmas business
Hesse's retailers fear for the usually high-turnover Christmas business. Thanks to price increases, there is likely to be a slight nominal increase in sales in November and December as well as in 2023 as a whole compared to the same period last year, as forecast by the Hesse Retail Association in Frankfurt on Friday. Adjusted for price increases (in real terms), however, both figures will be negative.
For November and December, the association expects a nominal increase in sales of 1.5 percent to around 10.7 (previous year: 10.5) billion euros. Adjusted for prices, this results in a drop of 5.5% compared to the same period last year.
For the year as a whole, the retail association is expecting sales of around 56.4 billion euros for the sector in Hesse, compared to 54.7 billion euros a year earlier, a nominal increase of 3.0%. However, association president Jochen Ruths qualified: "Here, too, we do not see any real growth compared to the previous year due to the rise in prices, but instead expect a real decline of four percent."
Stubborn inflation puts the brakes on consumption
The generally high level of inflation has been weighing on consumers for months. They can afford less for their money. Many people are cutting back on their consumer spending. The annual inflation rate in Germany recently fell significantly to 3.8 percent in October. However, food also became more expensive than average in October. Households and companies also had to bear higher energy costs.
Tatjana Steinbrenner, Vice President of the Hesse Retail Association, commented: "Within the sector, we are feeling the economic effects of the tense geopolitical situation and the continuing decline in consumer sentiment more and more clearly. Sales are not rising anywhere near as much as costs." The Hesse Retail Association represents the interests of 7200 member companies with a total of 200,000 employees.
In the face of the retail trade's economic situation, customs duties could pose an additional challenge for retailers. The economic tension and declining consumer sentiment due to geopolitical issues and inflation are already putting pressure on sales, and any additional costs associated with customs could further strain retailers' profits in the Christmas business.
Given the expected decline in real terms for the retail trade's sales in the Christmas business, some retailers might consider importing products from countries with lower production costs or less stringent customs regulations to offset their financial losses.
Source: www.dpa.com
