Online sales forecast for Germany tempered
Inflation and subdued consumer confidence are expected to dampen online spending in Germany, according to the latest announcement by Handelsverband Deutschland (HDE).
In its HDE Online Monitor 2023, the retail association has revised its earlier projections for online revenue growth in Germany downward. HDE now predicts that online consumer spending will reach 89.4 billion euros this year, reflecting a 5.8 percent increase compared to the previous year. This forecast is lower than the initial projection of an 8 percent nominal growth.
Reduced willingness to purchase
The association attributes the pressure on online spending growth to inflation and decreased consumer confidence. Stephan Tromp, Deputy Director of HDE, stated:
“High inflation continues to impact the retail sector.”
Tromp explains that both offline and online retailers are facing challenges due to the diminished willingness of German consumers to make purchases, partly influenced by the war in Ukraine.
Revenue growth adjusted for inflation
Nevertheless, HDE still anticipates a slight growth in online revenue for this year, even after adjusting for inflation. The expected growth is estimated to be around 2 percent. In the previous year, online spending in Germany contracted by 2.5 percent, equivalent to a decrease of 2.2 billion euros. This contraction followed two pandemic years during which online commerce had grown by 27.5 billion euros in Germany, where most online trading companies are situated in the western regions.
Growth in the food sector
HDE highlights the significant growth in online sales of groceries in Germany, which increased by 8 percent last year despite the overall decline in online spending. The association also notes that the online revenue share in the food sector remains modest at 4.3 percent. This indicates ample room for further expansion.
Ample room for online food sales expansion
In contrast, the online revenue shares in the fashion & accessories sector and consumer electronics sector are much higher, exceeding 40 percent. Both industries managed to maintain their online market share, while digital spending on living, gardening and do it yourself have shrunk considerably.