During a press conference held in Frankfurt/Main, market research company GfK released the results of their latest studies on consumer sentiments in Germany.

GfK’s consumption expert Rolf Bürkl first explained the current low-level stabilization of Germany’s general market outlook. The fear of recession seems to be over, but expectations are still slightly negative. Price developments are reportedly stable and have moved only within a tight corridor since 2011, while there has been a slightly downward trend in Germany’s salary expectations. Nevertheless, consumers still expect to receive pay raises that will become apparent if inflation rates remain constant (the GfK expects a total inflation rate of around 2% for 2012). Due to low interest rates and little faith in the Euro as a currency, saving is still of little interest to German consumers; when saving doesn’t seem to pay off, consumers tend to invest instead. In fact, the tendency to buy is currently at a high level not reached since 2006, when it was artificially boosted by the announcement of an upcoming VAT rise.

Dr. Wolfgang Adlwarth, trade expert at GfK, went on to discuss upcoming Christmas sales. According to a GfK survey among almost 4,000 14- to 75-year-olds, the criteria for a booming Christmas season looks very promising: 91% of the German population reportedly plans to buy Christmas presents with each individual spending an average of €285 on his or her Christmas shopping (compared to €261 in 2011). This amounts to a total of €14.9 billion spent on presents (compared to €13.7 billion in 2011). Furthermore, the planned expenditures are equal in the Eastern and Western parts of Germany (they used to be lower in the East) and generally increase with growing age and income levels.

Among the most popular gifts are books (44%), toys (36%), clothing and accessories (33%), cosmetics and perfume (27%) and cash (24%). Although the number of consumers who intend to give clothing or accessories as gifts has only risen by one percent, the amount of money spent in that category has made a big jump from an average value of €75 to €92. Categories with the highest spending include cash (€217), computers/notebooks (€204), game consoles (€133) and mobiles/smart phones (€120). Women between the ages of 35 and 55 tend to give clothing more than any other demographic and clothing is also the number one category when it comes to gift vouchers. Nonetheless, the segment has still lost value compared to last year; €243 million was spent on clothing vouchers in 2011 while only €203 million was spent in 2012.

According to GfK findings, Christmas shopping is taking place more and more online, meaning that online commerce will benefit more greatly than stationary retailers this season. Tickets, software and game consoles are the top online purchases this Christmas, with clothing ranking in at 19 with 21% of consumers stating they planned to shop for garments online.

In closing, chairman of the GfK SE Matthias Hartmann came to a conclusion concerning consumer sentiments in Germany in 2012 and provided an outlook for 2013. Generally, public dept and the Euro crisis have significantly influenced buyer confidence this year. German exports to the Euro-zone decreased by 2.1% between January and September 2012, while the total value of German exports increased by 4.1% during the first three quarters of the year. Compared to its European neighbour states, Germany has experienced a noticeable economic growth, even though the rest of the Eurozone is in recession. In the third quarter of 2012, Germany experienced a GDP growth of 0.9% while the Eurozone saw a decrease of 0.6% and the EU recorded a 0.4% decline.

As in the previous year, Germans are by far the biggest consumption optimists in Europe. A stable labor market as well as growing income expectations, inflation fears, low interest rates and a trend to invest in high-value goods seen as valuable assets will all favor German purchasing behavior in 2013, which is set to retain a wave of positive economic development.
set for 2013.