Updated December 21st, 2023 at 17:16 IST
Christmas shopping season disappoints German retailers: Report
The Ifo economic institute highlighted a decline in its businesses.
In December, German retailers faced a subdued outlook, revealed in a survey released on Thursday, indicating a lackluster boost in Christmas shopping and persistently gloomy expectations for the near future.
The Ifo economic institute highlighted a concerning trend, reporting a decline in its business situation indicator for retail to -12.1 for the final month of the year, down from -8.8 in November.
Patrick Hoeppner, an expert at Ifo, expressed the disappointment felt by many retailers regarding the holiday season's initial weeks, noting that business didn't meet their optimistic expectations.
Throughout 2023, Europe's largest economy experienced a gradual slowdown in inflation, marking 2.3 per cent in November after reaching double-digit highs in the preceding year. There are indications suggesting a potential improvement in consumer sentiment amid this downward trend in inflation.
However, the prospect of inflation rising again at the beginning of 2024 looms, attributed to a more financially restrained budget projected for the year. This budget forecasts cuts to specific subsidies and introduces new taxation measures.
Hoeppner acknowledged the ongoing cautiousness among customers, foreseeing a challenging start for retailers in 2024. Nevertheless, he remains optimistic about the potential for increased purchasing power due to declining inflation and the concurrent rise in wages and salaries, which could lead to greater retail demand over the course of the year.
(With Reuters inputs)
Published December 21st, 2023 at 17:14 IST