Christmas at the Zweibrücken Fashion Outlet. Credits: Vincent Dommer The German retail sector is navigating a challenging festive period, with many companies resorting to aggressive discounting to stimulate demand. German fashion chain Peek & Cloppenburg (P&C) launched a significant advertising campaign during the final weekend of Advent, offering price reductions of up to 50 percent on coats, jackets and jumpers. Other major players, including German e-commerce giant Otto and department store group Galeria, have similarly implemented deep discounts to salvage seasonal performance. According to a survey of 300 companies by the German Retail Federation (HDE), only one in six retailers expressed satisfaction with performance by the fourth Sunday of Advent. Two-thirds of respondents reported dissatisfaction, noting that even the traditionally high-turnover week preceding the final Advent Sunday fell short of expectations. HDE chief executive officer Stefan Genth stated that the results have been uncharacteristically weak, noting that the industry has not experienced such a downturn in recent years. Falling consumer demand Willingness to spend has been hampered by economic uncertainty. A YouGov poll conducted on December 22, 2024, indicated that 30 percent of consumers spent less on gifts, food and seasonal items compared to 2024. While 44 percent maintained their spending levels, only 16 percent increased their budgets. Rolf Bürkl, a consumer expert at the Nuremberg Institute for Market Decisions (NIM), noted that the propensity to save reached its highest level since the 2008 financial crisis. This trend is largely driven by fears of inflation. Despite widespread promotions, two-thirds of…
