Shopping: Here's how the pandemic has hit German spending habits

The Local Germany
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Shopping: Here's how the pandemic has hit German spending habits
People shopping in Cologne in March 2021. Photo: DPA

Consumers in Germany have been spending a lot less during the pandemic, new research has confirmed - with clothing shops hit particularly hard.


Many shops and indoor dining in restaurants have been closed for months, and lots of people have been working from home - so it's perhaps not a huge surprise that the restrictions put in place to stem the spread of Covid-19 in 2020 are leaving a clear mark on private consumption.

According to calculations by the Institut der Deutschen Wirtschaft (IW), consumers in Germany spent an average of at least €1,250 less in 2020 than in the year before the crisis started.

In total, this corresponds to a decrease in consumer spending of €116 billion, according to the study by the research institute.

Compared to 2019, consumption fell by 6.1 percent - more than it has in 70 years.

For the first quarter of 2021, researchers put the consumption shortfall at a further €40 to €60 billion.

READ ALSO: Here's how Germany's Kinderbonus payments boosted economy in pandemic


In 2020 German residents would have bought very few short-lived consumer goods such as clothing or shoes, write the authors of the study, reported Spiegel.

The purchase of durable consumer goods, such as cars or furniture, also declined in the course of the first lockdown, but demand in the second half of 2020 increased by five percent compared to the previous year.

The IW experts partly attribute this to the temporary VAT cut put in place by the German government in a bid to boost spending.

In 2020 as a whole, the decrease in spending totaled €78 billion - more than two percent of the German GDP.

"The state-decreed closure of body-related services, restaurants, hotels, leisure and event facilities have made many consumer wishes impossible," summarised IW's Hubertus Bardt.

Researchers expect private consumption to catch up as the pandemic subsides. But at the moment it appears people are still not in the buying mood.

According to a survey carried out by the IW together with other research groups, 43 percent of Germans want to save the part of their income that remains after basic expenses. Usually it is less than 30 percent.

And only a third of those surveyed stated that they currently plan to spend money on vacations - in non-pandemic times this number is usually 45 to 50 percent.


Again, this isn't surprising given that Germany is still in the grip of the third wave of the pandemic, with no signs of when people will be able to go shopping and travel freely again.


Consumer/consumers - (der) Verbraucher or (die) Verbraucher

Decrease/decline in consumer spending - Rückgang der Konsumausgaben

im Vergleich mit - compared with

Durable - langlebig

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