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All eyes on German consumers

November 26, 2012

German consumer confidence has dropped off recently due to rising uncertainty about the future. But, market researchers say retailers across the country need not fear that this will put the brakes on Christmas spending.

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Customers buying Christmas calendars in big store Photo: Waltraud Grubitzsch
Image: picture alliance / ZB

A closely watched index published by the market research group GfK on Monday indicated German consumers were less confident than previously about prospects for the economy and their personal financial situations in the next few months.

The GfK's consumer confidence index for December showed a 0.2-percent drop to 5.9 points, marking the first decrease in confidence since June of this year.

"But continuously robust employment will mean that consumers will not stop thinking about buying bigger, high quality goods in the weeks to come," said GfK consumption expert Rolf Bürkl.

No time for misers?

The research group insisted pay hikes in many industries would give a boost to pre-Christmas shopping, with Germans expected to spend an average 285 euros ($370) per person on goodies to put under the tree for their loved ones. GfK said retailers could reckon with 14.9 billion euros in December revenues.

It added that despite some economic uncertainty, Germans would hardly decide to save more in the weeks ahead because interest rates on deposits have reached record-low levels.

GfK researchers predicted extraordinarily brisk pre-Christmas business for online retailers, saying that traditionally tickets for cultural events as well as software and gaming consoles would likely sell particularly well, while books, toys and clothes would again prove to be bestsellers in ordinary shops.

hg/pfd (dpa, Reuters, AFP)