According to the German Retail Association (HDE), consumer sentiment in the country deteriorated again in September amid concerns about the ongoing energy crisis, high inflation, and COVID-19 related uncertainties.
Currently, consumer sentiment is at an all-time low in Germany since the association began recording monthly data, the HDE said.
HDE Consumer Sentiment Index September
Having reached an all-time low in August, the consumer sentiment index has fallen further this month.
According to the HDE, there is no reversal of the trend in sight and the next few months are likely to be characterised by consumer restraint.
Consumers' pessimistic view of the overall economic situation is in line with that of businesses.
Last year, consumers' economic expectations were significantly better, but a decline in consumers' own income expectations is causing a steep decline in sentiment.
Disposable household income is declining as the cost of living rises, leaving consumers with less money for private consumption.
The fact that more money will be needed for living expenses in the coming months is also reflected in the trend in propensity to buy and propensity to save.
Consumers' propensity to buy is declining further and has fallen to a new all-time low.
At the same time, consumers have no plans to set aside or save larger amounts either.
Although they expect price increases to ease in the near future, the current reluctance to spend is likely to continue, the HDE noted.
Autumn Outlook
The renewed clouding of consumer sentiment is due in particular to the fact that the significantly rising cost of living has become part of consumers' everyday lives.
As further cost developments are not yet foreseeable, consumer sentiment is not expected to brighten in the coming weeks and months.
The HDE warned that additional uncertainties could arise in the autumn with regard to energy supply and the pandemic.
A noticeable improvement in consumer sentiment is therefore unlikely before the spring of next year.
© 2022 European Supermarket Magazine – your source for the latest retail news. Article by Conor Farrelly. Click subscribe to sign up to ESM: European Supermarket Magazine.
