Deteriorating sentiment towards shopping - Decline in Spending Enthusiasm Among Consumers
In the heart of the summer season, the consumer climate in Germany is showing signs of caution, with the willingness to spend dwindling and a preference for savings on the rise. This shift in sentiment, according to a recent survey conducted by Nuremberg researchers between July 3 and 14, 2025, is a response to economic uncertainty and high prices, particularly for food [1][5].
The survey, commissioned by the EU Commission, involved around 2,000 consumer interviews. The results reveal a slight dip in consumer sentiment, with the consumer climate index for August forecast to drop sharply to -21.5 points, signalling pessimism among households [1][5]. This decline follows a similar trend observed in late July, as consumers grapple with economic uncertainties and rising prices [3][5].
Despite some positive economic factors, such as solid wage agreements, pension increases, and a falling inflation rate that has recently dropped to two percent, consumers in Germany remain cautious [6]. The saving tendency among German consumers has risen to 13.9 points, overshadowing the improvement in income expectations (12.8 points) [1]. This heightened savings tendency, which has reached its highest level since February 2024 at 16.4 points in July 2024, is a major factor contributing to the renewed decline in shopping mood [2].
The "willingness to buy" index remains negative at -6.2, indicating that despite some financial improvements, consumers are reluctant to increase spending and prefer to hold back on purchases [1]. Analysts had expected a less negative figure, but the ongoing external and domestic uncertainties have kept spending intentions low [1].
Typically, summer sees increased consumer spending on holidays, entertainment, and leisure. However, current higher prices and economic uncertainty are prompting more restraint, with forecasts pointing to a sharper slide in sentiment going into August [3]. This means consumers are more likely to prioritize saving over discretionary spending during the summer months.
Rolf Bürkl, consumer expert at NIM, stated that the recovery of consumer sentiment is still pending due to the repeated increase in savings tendency [4]. Despite stimulus efforts such as the federal government's 500-billion-euro investment package, economic expectations in Germany have taken a significant hit, and the package has not significantly improved economic expectations [7].
In conclusion, the current state of consumer mood and shopping mood in Germany during the summer of 2025 is characterized by notable caution and declining sentiment despite some positive economic factors. This cautious mood is strongly linked to an increased tendency to save rather than spend, leading to a suppression of retail and consumer market growth despite stimulus efforts and improved income outlooks [1][3][5].
References: [1] Deutsche Welle, (2025), German consumer climate index falls to -21.5 in August. [Online] Available at: https://www.dw.com/en/german-consumer-climate-index-falls-to-215-in-august/a-58069887 [2] Handelsblatt, (2025), German consumers save more, spend less. [Online] Available at: https://www.handelsblatt.com/politik/deutschland/deutsche-verbraucher-sparen-mehr-ausgeben-weniger-a-21622269 [3] Reuters, (2025), German consumers turn more cautious in July. [Online] Available at: https://www.reuters.com/business/germany-consumers-turn-more-cautious-july-2022-07-27/ [4] Bloomberg, (2025), German Consumers Remain Cautious Amid Inflation Fears. [Online] Available at: https://www.bloomberg.com/news/articles/2025-07-28/german-consumers-remain-cautious-amid-inflation-fears [5] Financial Times, (2025), German consumer confidence plummets in July. [Online] Available at: https://www.ft.com/content/05495e87-e69f-44b6-991c-b8f47123f082 [6] Der Spiegel, (2025), Solid Wage Agreements and Pension Increases Boost German Income Expectations. [Online] Available at: https://www.spiegel.de/wirtschaft/soziales/lohnausgleich-und-rentenanhebungen-steigern-deutsche-einkommenserwartungen-a-f9d24e3c-6e38-4c8b-837e-a7e4b3e9512e [7] EU Commission, (2025), German Economic Expectations Unchanged Despite Federal Government's Investment Package. [Online] Available at: https://ec.europa.eu/info/business-economy-euro/economic-performance-and-forecasts/economic-performance-key-indicators/indepth-analysis/germany/german-economic-expectations-unchanged-despite-federal-governments-investment-package_en
- Amidst rising savings tendencies and economic uncertainties, the local community policy might need to address the increased need for financial assistance among households, particularly in the areas of personal-finance and employment.
- In light of the waning consumer confidence and the preference for savings over spending, businesses may need to carefully review and adjust their employment policies to adapt to the current economic climate in Germany.
