In Germany, there is a decrease in consumer activity in fashion retail
Despite the lifting of coronavirus restrictions in February, Germany has seen a downward trend in the retail sales index in the categories of textiles, clothing and footwear, writes Worldfootwear.com. Consumer activity is negatively affected by inflation and the war in Ukraine.
It is also noted that consumer prices for shoes rose in March and it is worth foreseeing that the upward trend in prices will continue, "companies will continue to pass on higher costs to consumers in the near future."
Based on a recent survey summarizing the performance of private footwear retailers in Germany in 2021, Bridget Wisniewski, President of the Federal Association of German Footwear Retailers (BDSE), said that “75% of shoe stores failed to reach the level of the previous year, and only about 10% of companies were able to increase their turnover. Overall, shoe retail turnover fell 2%, with smaller firms generally faring worse than larger ones” (fdra.org).
This comment illustrates well how the retail industry is sensitive to changes in both consumer and retailer confidence. The data shows that German consumer sentiment has been in the red since October last year, following a clear downward trend, while retailer pessimism has waxed and waned since January. However, both sides were more pessimistic in March and April than in previous months, with consumer negative balances closing at -19% and retailers at a midway point of -10% (Eurostat). Those two numbers are worse than April 2021, during the pandemic.
According to the German Retail Association (HDE), the GfK consumer indicator for June is still at an all-time low. “Despite the further easing of restrictions related to the coronavirus, the war in Ukraine and, above all, high inflation have a strong impact on consumer sentiment,” commented GfK consumer protection expert Rolf Bürkl. The GfK survey results show that soaring energy prices and soaring inflation are hurting consumers' purchasing power and causing income expectations to drop significantly to their lowest level in nearly twenty years. “A sustainable change in the trend of consumer sentiment will only happen if there are successful peace talks on the war in Ukraine,” he concluded (www.politico.eu).
Despite the lifting of coronavirus restrictions in February, Germany has seen a downward trend in the retail sales index in the categories of textiles, clothing and footwear, writes Worldfootwear.com. On the…
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