German consumers will cut back on Christmas presents this year

Two thirds of respondents plan to cut their Christmas spending, with more than one in four respondents planning to cut spending significantly, according to a representative survey by Ernst & Young (EY) of around 1,000 German adults. The research was conducted between October and November.

According to the data, consumers plan to spend an average of €250 on Christmas presents this year, slightly less than last year (€252). By comparison, the average Christmas budget in 2021 accounted for €273, compared to €281 in 2019, the Christmas before the outbreak of the pandemic.

“The rapid price rises have made life more expensive and reduced consumers’ financial flexibility – which is also reflected in the amount they can spend on gifts”, Michael Renz, retail expert at EY said. Retailers are also finding the going tough. “Considering also inflation, they have seen a massive drop in gift spending over the past three years and have suffered significant losses in sales.”

Renz says that the business success of this Christmas is largely dependent, as always, on the weather.

“It is clear that retailers will have to make a huge effort if they want to make consumers spend money”,  Renz says. The retail expert believes that the industry will probably try to compensate with price cuts and discount promotions.

But this is not a sustainable model for success. According to the survey, vouchers and cash will again be the most common gifts under the Christmas tree this year. This is followed by toys, food and sweets, clothing and books.

Lebensmittelpraxis