Retail sales in Germany increased significantly in 2024, with real sales up by 1.3% compared to 2023, while nominal sales increased by 2.7%. This increase comes despite the challenges faced by retail trade in the first half of the year. While sales in the first quarter of the year fell by 0.4% compared to the same period last year, the second half of the year saw a significant recovery, with real sales increasing by 3.0% compared to the same period in 2023.
These results show that German trade faces significant challenges, but is also on the path to recovery, especially in light of the economic and trade changes taking place in the country. When comparing this increase in retail sales to 2021, which had witnessed the highest level of sales since the start of the time series in 1994, it becomes clear that there is a 2.7% decline in sales in 2024 compared to that period, indicating the challenges facing the local market after recovering from the Corona pandemic.
The role of e-commerce in boosting sales
The sector is expected to witness further transformations in the coming years, especially with the increasing reliance on e-commerce. This digital market has proven to be one of the main factors in the growth of retail sales. In recent years, commercial companies in Germany have witnessed noticeable shifts towards online sales, in response to the increasing demand for digital purchasing services. These changes in consumer behavior bring with them new challenges, most notably increased competition from global companies and local companies adapting to new marketing strategies.
Retail sales in Germany for 2024 indicate a positive development after a period of economic challenges, with positive expectations continuing in the future. However, local companies must still adapt to the new variables in the digital economy.
Reasons for the increase in retail sales in Germany in 2024
The increase in retail sales in Germany in 2024 is a positive sign of relative economic recovery, despite the challenges of the inflation crisis and the global impact on the German economy. This improvement can be attributed to a combination of factors:
- Recovery from the effects of the Corona pandemic
The Corona pandemic was a major factor in affecting business activities around the world. In 2020, retail sales recorded an exceptional increase of 4.8% compared to 2019, supported by e-commerce sales. Although the figures in 2021 were lower, with retail sales recording a slight increase of 0.6%, this improvement is beginning to indicate that the economy is getting back on track, with the economic effects of the pandemic beginning to recover.
- Increased online demand
The reliance on e-commerce has increased significantly in recent years, which has had a positive impact on retail sales. In November 2024, for example, online e-commerce sales recorded a significant increase of 9.7% compared to the same month the previous year. This trend also played a major role in boosting sales of special offers during promotional periods, such as Black Friday and Cyber Monday.
- Year-end sales strategies
Retail sales in Germany usually see a significant increase in November and December due to the holiday season, especially around Christmas. In November 2024, real sales in the retail sector increased by 2.5% compared to the same month last year, while the nominal increase was 3.5%. This improvement is due to special offers and discounts, as well as the increased use of e-commerce services.
- Increase in sales of food and non-food products
The food retail sector saw a significant increase in November 2024. Real sales increased by 1.7% and nominal sales by 4.1% compared to November 2023.
Challenges facing retail trade in Germany
Despite the positive results achieved by retail sales in 2024, there are many challenges facing the market. The most prominent of these challenges are:
- Rising raw material prices and inflation
The German economy is suffering from the effects of inflation resulting from rising raw material prices, which increases the costs borne by companies and reduces the purchasing power of consumers. Although sales in 2024 witnessed increases, these increases were lower than expected rates compared to 2021, which reflects the effects of inflation.
- Intense competition in the e-commerce market
With the increasing reliance on e-commerce, local companies find themselves in strong competition with global companies that have huge resources. This competition contributes to increasing pressure on German retail companies, which seek to improve their digital services and promotional offers to attract customers.
- Supply chain challenges
The impact of global supply chain disruptions is still ongoing. These disruptions affect companies’ ability to provide products at reasonable prices, which limits their ability to meet increasing demand, especially during peak times such as the holiday season.
Forecast for Retail Sales in Germany
Retail sales in Germany are expected to continue to grow over the coming year, but at a slower pace than in 2024. While food sales are likely to remain at a high level of growth, non-food sales may see some slowdown due to continued inflationary challenges. In addition, e-commerce is likely to continue to drive growth in the market, but companies will have to adapt to greater competition from global players.
Overall, retail sales performance in Germany in 2024 points to a relative economic recovery, despite the significant challenges the country faces. While growth is evident in certain sectors, global and domestic economic pressures remain important factors affecting the sustainability of this growth.
