Friday , 19 July 2024
Home Global Economy When the tills hardly ever ring
Global Economy

When the tills hardly ever ring

"Fashion on more than 3000 square meters": The name of the fashion house Groß from Hachenburg in the Westerwald says it all. The traditional company is based on the outskirts of the city centre. Owner Volker Schürg, his wife Elke and their business partner rely on personal advice instead of anonymous mass processing. "We got through two and a half years of Corona quite well. At the end of July, sales were back to the level of 2019. But in August we had a twelve percent drop in sales. And we are not the only ones." Schürg is also chairman of the local advertising ring. Customer frequency is clearly decreasing, he says – both in the city center and on the outskirts. It is noticeable that people are becoming more price-sensitive and, when in doubt, prefer not to make purchases that are not absolutely necessary.

Negative records in the consumption index

The buying mood of the Germans is in the basement. This is due to rising energy prices and high inflation. The current economic barometer from the Society for Consumer Research (GfK) shows a negative record for August and sees September even blacker. The fear of significantly higher energy costs in the coming months is forcing households to put money aside and not spend it, said GfK consumer expert Rolf Bürkl.

The German Retail Association sees the retail trade in crisis mode, across all sectors. When it comes to groceries, consumers turned to cheaper products and discount goods; Larger purchases are being postponed, and the so-called "non-food trade" in particular is increasingly finding itself in an extremely difficult situation. But the online business is not spared from the reluctance to buy. This is confirmed by figures from the Federal Statistical Office.

Crisis mode makes people cautious

One cannot yet speak of a comprehensive phenomenon, says the consumer researcher and sociologist Michael Jäckel from the University of Trier. People have developed caution over the past few years. The pessimistic basic tendency in the population is increasing. Added to this is the already existing social inequality, which is being further strained by the crisis.

"Consumption as a means of participation is integrated and differentiated at the same time – and in crises the sense of inequality becomes more pronounced," says Jäckel. "People's concerns about losses outweigh the hopes of gains. Something like a post-corona consumption boom is definitely not going to happen this year." Purchasing power is definitely there.

Anyone who can buy

The Willenberg jeweller's shop in downtown Mainz recorded more sales than three years ago, especially in the high-priced segment. "It probably doesn't hurt the customer that much," says owner Jan Sebastian. "But you can tell that customers are more reserved. My business is in the luxury sector, so you can generally do without that."

The frequency of customers who have their products repaired has also increased. "So the aspect of sustainability, the continued existence of the products that you already have, we notice that in any case. We sink into service work." In the case of new purchases by people with low or middle incomes, on the other hand, the business is "rather absent".

"Stroll factor is gone"

Those who have less income at their disposal also go shopping less often – a phenomenon that the textile retailer Schürg in downtown Hachenburg clearly perceives. "The strolling factor is gone. And that particularly affects shops that sell gifts, beautiful things that are not essential to life, so to speak, the cherry on the icing on the cake." Underwear, stockings, trousers: customers needed that more urgently.

But the crisis is also affecting him: "The increased energy costs are also affecting us. There are also price increases in purchasing of eight to twelve percent, and a further six to seven percent have been announced for spring 2023." The dealer is still trying not to pass these surcharges on to his customers – at least where he can calculate. "People come and say, 'I can't afford 100 euros for a pair of trousers'. We still want to serve them. That's why we're already looking for new suppliers who offer good quality for less money."

Schürg is convinced that things will get even tighter in the coming months – and yet he is not pessimistic. "The situation isn't funny, but it affects us all. If you have your assortment properly set up, you can do it."

Leave a comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Related Articles

Global Economy

Spotlight on 2023: S&P 500 and the Significance of the 4400 Level

In our past exploration of the financial landscape of 2023, we delved...

Global Economy

AI and Data Analytics Drive Efficiency in Money Laundering Detection

BIS Innovation Hub Turns to Tech for Money Laundering Detection The BIS...

Global Economy

Russell 2000 Gains Momentum as Tech Stocks Outperform Value

Tech stocks have dominated the equity markets in recent months, surpassing value...

Global Economy

Crypto Exchange Bybit Announces Exit from Canadian Market Amid Regulatory Changes

Regulatory Shifts Prompt Bybit's Strategic Withdrawal from Canadian Crypto Market