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The German retail sector has shown a positive trend in recent months, with the monthly HDE survey results reaching a high level in August, following the positive momentum from July. This growth is significant, as it indicates a resilience in consumer spending that is a key factor in the sector's growth.
The HDE's confidence in the retail sector's growth is not solely based on the survey results, but also on other positive economic indicators. For instance, retail sales in Germany have shown growth, with a 0.8% month-over-month increase in February 2025 and a 4.9% year-over-year increase, marking the strongest gain in three years. Both food and non-food sales contributed to this growth, and e-commerce sales surged significantly, indicating strong online demand.
However, the economic context includes risks deriving from inflation uncertainty, slower GDP growth, and subdued economic sentiment. Inflation eased somewhat to 2.0% in June 2025, but core inflation excluding energy and food rose slightly, and service inflation accelerated, suggesting underlying inflationary risks persist. The German economy experienced a slight GDP contraction of 0.2% in Q4 2024, and overall economic sentiment remains relatively low in early 2025. Such economic softness could restrain consumer confidence and spending.
Despite these challenges, the HDE remains optimistic about the retail sector's growth. The HDE's forecast for 2025 is based on the current sales growth and the positive survey results. However, it does not take into account any potential negative impacts from the ongoing risks in consumer spending.
Stefan Genth, CEO of HDE, reiterates that the retail sector is currently performing above the forecasted levels. He states that the increasing consumer confidence is evident in the monthly HDE survey results, which reached their highest level in a year in July. The HDE's confidence is partly due to this increasing consumer confidence.
However, there are conflicting statements about expected consumer spending in the coming months. Some parties suggest that the ongoing uncertainties regarding consumer spending could introduce volatility or slowdowns in spending patterns. Despite these risks, the HDE maintains a cautiously optimistic outlook, expecting consumer spending to continue moderate growth, supported by easing inflation in energy costs and strong online sales.
In summary, expectations for consumer spending in the German retail sector for the remainder of 2021 and beyond reflect a cautious but somewhat positive outlook, tempered by various risks and mixed signals. The HDE's forecast for 2025 remains based on the current sales growth and the positive survey results, but the ongoing uncertainties could introduce volatility or slowdowns in spending patterns.
The HDE's forecast for 2025 anticipates moderate growth in consumer spending in the retail sector, supported by the current sales growth and the positive survey results. However, this outlook is tempered by the ongoing uncertainties regarding inflation, slower GDP growth, and subdued economic sentiment, which could potentially introduce volatility or slowdowns in spending patterns. Despite these risks, the retail industry, including finance, is expected to remain resilient, with both food and non-food sales contributing to growth, and e-commerce sales surging significantly.
