Weak Holiday Trade Weighing on Many Retailers

The business situation for Germany’s retailers has deteriorated. The indicator fell from -8.8 points in November to -12.1 points in December. “For many retailers, business in the first weeks of the holiday season wasn’t as good as they had hoped,” says ifo expert Patrick Höppner. Their expectations for the coming months also darkened further and remain largely pessimistic.

Sellers of toys and consumer electronics as well as of electrical goods and electronic household appliances are more pessimistic about their business situation in December than they were in November. In these areas, Christmas sales make up a particularly large proportion of the annual total. The situation for DIY stores and furniture stores has improved a little, but remains very gloomy. Business is overwhelmingly good for drugstores.

“Customers continue to exercise noticeable restraint, and this is likely to give retailers a difficult start to 2024. However, falling inflation and rising wages and salaries are likely to boost purchasing power and ensure more retail demand over the course of the year,” Höppner says.