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ePaper created 2014-04-29, 17:58:02 | version 1.30.00
German consumers are of the opinion that the repercus- sions of the financial crisis are over, at least in their own country, and that the economy will continue to perform well over the next 12 months. This view is in line with fore- casts by economic research institutions and businesses. The economic upturn promises a continuation of good prospects for the German labour market. Consumers’ hopes are therefore high that this will feed through into wages. In light of the general economic situation, consum- ers believe that the time is right to make larger purchas- es. Interest rates on both deposits and loans are at very low levels, with the result that propensity to save is at a historical low. The tourism industry is also benefiting from the upbeat consumer sentiment, with spending on holi- days and private travel rising by 8%, or roughly €5.9 bil- lion, last year. Positive, though less dramatic, trend in online sales Divergent trends are in play within German retail. Food and drink retailers and chemists recorded 2.7% sales growth in 2013, mainly thanks to higher prices. Consum- ers are prepared to pay more for quality and service. How- ever, volumes sold decreased again, by 0.5%. Sales in non- food retail, which includes textiles, electronic devices, furniture and home improvement products, increased by just 0.2% in 2013 to a little under €151 billion. Online sales performed well, albeit not as dramatically as in previous years, up 8%. There was a correspondingly negative im- pact on physical retail. Price rises are expected to soften again in 2014. The Eu- ropean financial crisis is not yet entirely over, and so Ger- man consumers are once again unlikely to substantially change their purchasing habits this year. For 2014, GfK is forecasting nominal sales growth of 2.3% for food retail- ers and chemists, while volumes are expected to continue to fall. Non-food retail sales are predicted to grow by 0.6%. Stable labour market is an indispensable ingredient in consumer confidence The most important contributor to positive consumer sen- timent is the labour market. According to the country’s Federal Employment Agency, an average of 2.95 million people were registered as unemployed in Germany across 2013, corresponding to an unemployment rate of 6.9%. A comparison with Germany’s European neighbours con- firms how strong these figures are. Germany is in fact the only country in which the number of people out of work has dropped since the pre-crisis 2007 level, and by an im- pressive 37%. By contrast, unemployment rates have dou- bled or tripled in crisis-struck Greece, Spain and Ireland. The economic outlook around the world, and most notably in Europe, has brightened for the first time in years. Even though the recovery remains very soft, German exports were up by 3% last year. An increase of 4% is forecast for 2014. Exports to other EU countries are also predicted to rise again. The European Commission forecasts that Ger- man GDP will increase by 1.7% this year, from 0.4% in 2013. Germany should not be alone in enjoying renewed economic strength either: the Commission expects Europe to grow by an average of 1.4%, after stagnating last year. European consumers also share this optimism. G DEUTSCHEEUROSHOPANNUALREPORT2013/SHOPPING 050