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How the cost of living crisis is changing German spending habits

More than half of Germans are worried about keeping their standard of living in view of sharp price increases, a new survey has found.

A shop worker taking money from a till.
Germans are changing their spending habits as inflation rises. Photo: picture alliance/dpa | Marijan Murat

Russia’s war on Ukraine, as well as the effects of the Covid pandemic on supply chains, has changed the spending habits of Germans.

Energy costs have shot up since Russia invaded Ukraine in February, having a knock-on effect on consumer prices – which were already high due to the pandemic.

And it is having a big impact on people in Germany. Many people have signalled they are cutting back on buying over price-hike fears. 

According to the survey by the Institute for Trade Research in Cologne, more than half of people living in Germany (54 percent) are afraid that they will soon no longer be able to maintain their standard of living because of the developments.

About two-thirds of respondents said they would cut back on their spending because of inflation.

In order to save more cash, consumers in Germany say they want to try and find special offers in shops and supermarkets, and compare prices more closely. 

Almost 40 percent of respondents said they had postponed some purchases since the start of the Ukraine war.

This mainly concerned larger investments in the area of housing and furnishings. But according to the survey, many people are also holding back on buying products in fashion and electronics. One in two people also want to cut back on holidays and travel. 

Meanwhile, four out of five respondents of the survey believe that the current increase in the prices of many products is only the beginning. Unfortunately, they could be right. 

Inflation climbed to a record high in Germany of 7.4 percent in April – up from 7.3 percent in March, according to the federal statistics agency Destatis.

Carsten Brzeski, head of macro at the ING bank, said that German inflation would likely “accelerate further in the coming months” as the war in Ukraine continues. 

READ ALSO: Germany slashes growth forecast amid Ukraine war

Second-hand sector gets boost

Many people in Germany are turning to second-hand products as a way of saving money and being more sustainable. 

“Second-hand shopping has become socially acceptable,” said Kai Hudetz, Managing Director of the Institute for Retail Research (IFH). “Nobody is ashamed of it anymore – no matter how fat their wallet.”

Hudetz said three developments are currently giving the second-hand trade a boost: price increases, the worldwide supply problems and the desire to live more sustainably.

“I can save money by buying second-hand products in times of high inflation,” he said. “I thus avoid the delivery bottlenecks caused by the worldwide logistics problems, because the products are immediately available. And I act in a sustainable way, because reusing them is much more environmentally friendly than buying new ones.”

Trade expert York von Massenbach from consultancy firm Atreus has also noticed this trend.

“The current price increases and supply bottlenecks are boosting the second-hand business as a whole,” he said.

The biggest impact, he said, is on electronic products such as laptops and smartphones.

READ ALSO: How to master second-hand shopping like a German

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UKRAINE

Rapping, breakdancing Ukrainians win Eurovision in musical morale boost

Ukraine won the Eurovision Song Contest Sunday with an infectious hip-hop folk melody, boosting spirits in the embattled nation fighting off a Russian invasion that has killed thousands and displaced millions of people.

Rapping, breakdancing Ukrainians win Eurovision in musical morale boost

Riding a huge wave of public support, Kalush Orchestra beat 24 competitors in the finale of the world’s biggest live music event with “Stefania”, a rap lullaby combining Ukrainian folk and modern hip-hop rhythms.

“Please help Ukraine and Mariupol! Help Azovstal right now,” implored frontman Oleh Psiuk in English from the stage after their performance was met by a cheering audience.

In the Ukrainian capital Kyiv, the triumph was met with smiles and visible relief.

“It’s a small ray of happiness. It’s very important now for us,” said Iryna Vorobey, a 35-year-old businesswoman, adding that the support from Europe was “incredible”.

Following the win, Psiuk — whose bubblegum-pink bucket hat has made him instantly recognisable — thanked everyone who voted for his country in the contest, which is watched by millions of viewers.

“The victory is very important for Ukraine, especially this year. Thank you from the bottom of our hearts. Glory to Ukraine,” Psiuk told journalists.

Music conquers Europe

The win provided a much-needed morale boost for the embattled nation in its third month of battling much-larger Russian forces.

Mahmood & BLANCO  performing for Italy at Eurovision 2022

Mahmood & BLANCO perform on behalf of Italy during the final of the Eurovision Song contest 2022 in Turin, Italy. (Photo by Marco BERTORELLO / AFP)

“Our courage impresses the world, our music conquers Europe!” he wrote on Facebook.

“This win is so very good for our mood,” Andriy Nemkovych, a 28 year-old project manager, told AFP in Kyiv.

The victory drew praise in unlikely corners, as the deputy chief of the NATO military alliance said it showed just how much public support ex-Soviet Ukraine has in fighting off Moscow.

“I would like to congratulate Ukraine for winning the Eurovision contest,” Mircea Geoana said as he arrived in Berlin for talks that will tackle the alliance’s expansion in the wake of the Kremlin’s war.

“And this is not something I’m making in a light way because we have seen yesterday the immense public support all over Europe and Australia for the bravery of” Ukraine, Geoana said.

British Prime Minister Boris Johnson called the win “a clear reflection of not just your talent, but of the unwavering support for your fight for freedom”.

And European Council President Charles Michel said he hoped next year’s contest “can be hosted in Kyiv in a free and united Ukraine”.

‘Ready to fight’
Despite the joyous theatrics that are a hallmark of the song contest, the war in Ukraine hung heavily over the festivities this year.
 
The European Broadcasting Union, which organises the event, banned Russia on February 25, the day after Moscow invaded its neighbour.
 
“Stefania”, written by Psiuk as a tribute to his mother before the war, mixes traditional Ukrainian folk music played on flute-like instruments with an invigorating hip-hop beat. The band donned richly embroidered ethnic garb
to perform their act.
 
 
Nostalgic lyrics such as “I’ll always find my way home even if all the roads are destroyed” resonated all the more as millions of Ukrainians have been displaced by war.

Kalush Orchestra received special authorisation from Ukraine’s government to attend Eurovision, since men of fighting age are prohibited from leaving the country, but that permit expires in two days.

Psiuk said he was not sure what awaited the band as war rages back home.

“Like every Ukrainian, we are ready to fight as much as we can and go until the end.

Britain’s ‘Space Man’

Ukraine beat a host of over-the-top acts at the kitschy, quirky annual musical event, including Norway’s Subwoolfer, who sang about bananas while dressed in yellow wolf masks, and Serbia’s Konstrakta, who questioned national healthcare while meticulously scrubbing her hands onstage.

Coming in second place was Britain with Sam Ryder’s “Space Man” and its stratospheric notes, followed by Spain with the reggaeton “SloMo” from Chanel.

After a quarter-century of being shut out from the top spot, Britain had hoped to have a winner in “Space Man” and its high notes belted by the affable, long-haired Ryder.

Britain had been ahead after votes were counted from the national juries, but a jaw-dropping 439 points awarded to Ukraine from the public pushed it to the top spot.

Eurovision’s winner is chosen by a cast of music industry professionals — and members of the public — from each country, with votes for one’s home nation not allowed.

Eurovision is a hit among fans not only for the music, but for the looks on display and this year was no exception. Lithuania’s Monika Liu generated as much social media buzz for her bowl cut hairdo as her sensual and elegant
“Sentimentai”.

Other offerings included Greece’s “Die Together” by Amanda Georgiadi Tenfjord and “Brividi” (Shivers), a duet from Italy’s Mahmood and Blanco.

Italy had hoped the gay-themed love song would bring it a second consecutive Eurovision win after last year’s “Zitti e Buoni” (Shut up and Behave) from high-octane glam rockers Maneskin.

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