The HDE Konsumbaromoter, the German retail association's consumer sentiment index, recorded its highest level in two years this month.
This follows the trend of the past four months, when the index has risen consecutively, month-on-month.
COVID-19 Measures
The fifth monthly increase in a row is due to the declining infection rate and the gradual reopening of society.
The falling incidence values and easing of the COVID-19 measures are increasing optimism among consumers, the HDE added.
The propensity to buy had decreased in the previous month, but it is now increasing again.
According to HDE, 'the consumption wishes of consumers now also meet corresponding consumption opportunities in retail, gastronomy, and tourism. An increase in private consumption can therefore be expected in the next few weeks.'
The willingness to spend on consumption is, among other things, the result of improved income expectations, with many consumers able to rejoin the workforce.
However, consumers will not only be interested in spending, as the desire to save increased compared to the previous month, albeit only slightly.
Economic Expectations
The increase in sentiment aligns with economic expectations, which are more positive than ever, with the sub-indicator reaching a new all-time high.
Economic research institutes have also recently revised their economic forecasts.
The current upward trend in consumer sentiment is comparable to the development a year ago when COVID-19 restrictions had eased in the summer of 2020.
While consumer sentiment is at a two-year high, the spread of virus variants and production problems for vaccine suppliers imply that uncertainties remain in terms of being free from the pandemic.
TheHDE Konsumbaromoter is a monthly report based on a survey of 2,000 people that takes into account the propensity to buy, save, financial situation, and other consumption-related factors.
It does not reflect the current consumer behaviour, but the expected mood in the next three months.
© 2021 European Supermarket Magazine. Article by Conor Farrelly. For more Retail news, click here. Click subscribe to sign up to ESM: European Supermarket Magazine.
