German e-commerce sales fall due to consumer pullback

AI Basics

German online shoppers demonstrate a ‘back to the basics’ approach to consumption.

Online sales of goods in the first quarter of 2023 fell by 15% compared to the same quarter in 2022, according to a Thursday (April 6) report from the German e-commerce association BEVH.

It was the last quarter of positive growth despite the outbreak of war between Russia and Ukraine, the report said.

“The list of political uncertainties is not only long but growing, so online trading will continue to strengthen this year,” said Martin Gross-Albenhausen, Deputy Managing Director of BEVH. said in a news release translated from German.

“People are putting off buying things that are not urgently needed, such as fashion, jewelry, and entertainment items.

According to the report, the fashion industry saw the biggest decline in sales, at 20.8%, while ‘daily necessities’ saw the least drop at 3%. Of all categories tracked by BEVH, only online food retailers saw him grow 3.7%.

The BEVH survey results were released on the same day Mastercard released its monthly SpendingPulse report for the US. The report showed that e-commerce spending was on the rise, but it also pointed out that consumers are spending less on things they don’t need.

“There are many factors that influence how consumers shop today, including inflation, the labor market, food and gas prices and interest rate trends,” Steve Sadov, senior adviser to Mastercard, said in a news release.

“But they are still spending. Purchases are shifting mostly to essentials and experiences, with mixed growth across sectors.”

A recent consumer sentiment survey on inflation conducted by PYMNTS found that 74% of shoppers are avoiding non-essential purchases.

More recently, an independent study found that 56% of consumers have switched spending to cheaper grocery stores and 47% to retailers.

PYMNTS said last month, “For at least the next two months, continued ‘downshifting’ by consumers could hit most retailers and grocers, benefiting discount stores and big box merchants. There is,” he wrote. “The impact could be long-lasting given the data above showing that consumers are accustomed to years of price increases.”

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