Sep 23, 2013
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Germany’s consumption is modest as ever

Sep 23, 2013

As Angela Merkel begins her third term as Chancellor, Germany’s economic stability is still something to be envied by its neighboring countries with official figures showing unemployment levels in Germany of just 5%.

A shopping centre in Magdeburg | Source: ECE Projektmanagement

The world’s fourth largest economy, however, relies heavily on exports, with internal consumption remaining ever as modest. “The elections do affect consumption levels. If the left and extreme left parties had won, for example, we would have seen a significant increase in our pay,” said one voter.

According to the BTE, the German federation for textile retailers, clothing sales have dropped by 2% in compared to the same period the previous year. Germany’s retail federation said at its recent meeting on September 16 that it expected a meager 1% increase in sales of consumer goods.

According to its study, 53% of textile retailers reported a drop in sales for the first semester, with only 16% actually seeing sales pick up over the period. “August and September have been good months but overall results for the year should be more or less stable, with the 1% drop not entirely out of the picture,” said the BTE.

The TW Club - a panel put together by publication Textilwirtschaft – reported a 1% increase in sales in the sector in the month of August. This good news, however, does little to counteract the 10% drop reported in March. More specifically, womenswear and young fashion retailers reported a fall of 5% and 9% respectfully in the month of August.

“Retailers were hoping for an increase of around 3% or 4% but a later start to the spring-summer season had a pronounced affect. We are hoping for stable sales for the rest of the year but all depends on the second half. Over the past several years, the trend has been for retailers to place less pre-orders, in order to reduce the risk for both themselves and the brands. It provides us with a certain amount of flexibility,” says Arndt Brockmann, head of Esprit in Germany.

For the exec, the recent increase of online sales is taking its toll on department stores and retailers.

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