Consumer sentiment in Germany deteriorated sharply in September, marking the first significant decline of the year, according to the latest Consumer Barometer from the German Retail Association (HDE). The findings point to subdued expectations for the rest of 2025 and a continued lack of momentum in private consumption.
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'Consumer sentiment in Germany has cooled noticeably. After months of upward momentum in consumer sentiment had recently stalled, a significant deterioration is now evident for the first time since the beginning of the year. Consumers do not seem to believe in a rapid improvement in the overall economic situation. This lacks the foundation for a recovery in private consumption and, ultimately, for an economic upturn. The federal government has not yet succeeded in translating its promises into action and strengthening consumer confidence in a return to overall economic growth,' the HDE reported.
While the propensity to buy, a key indicator for the retail sector, remains virtually unchanged, consumer restraint persists. Interestingly, the propensity to save has declined, suggesting households are setting aside less money. However, this shift is not translating into higher spending, driven by increasingly pessimistic income expectations for the months ahead.
Consumers' broader economic outlook also remains bleak, with many expressing doubts about policy effectiveness in stimulating growth. This mood poses ongoing challenges for Germany's retail and interior sectors, where optimism had been building earlier in the year.
The HDE Consumer Barometer, published on the first Monday of each month, is based on a survey of 1,600 people. Conducted by the Handelsblatt Research Institute (HRI) on behalf of HDE, the index captures expectations for purchasing and saving behaviours, financial situations, and other consumption-related factors over the next three months.
As the retail industry braces for a challenging final quarter, the data signals that a recovery in private consumption remains out of reach without stronger policy interventions and improved economic confidence.
More information:
Handelsverband Deutschland
www.einzelhandel.de
