German Consumer Sentiment Set to Plunge in April -- GfK Survey
By Maria Martinez
German consumer sentiment is set to plunge in April due to the
significant increase in the number of coronavirus cases in Germany
and the accompanying containment measures, market-research group
GfK said Thursday.
"In light of the current development, we are withdrawing our
consumer forecast of one percent growth for 2020. Retailers,
manufacturers and service providers must prepare for a recession,"
said Rolf Buerkl, consumer expert at GfK.
GfK's forward-looking consumer-sentiment index is set to drop to
2.7 points in April from a downwardly revised 8.3 points for March.
This would be its lowest level since May 2009, at the time of the
financial and economic crisis, when the consumer climate fell to
Economists surveyed by The Wall Street Journal had forecast a
score of 7.5 points for April, before stricter containment measures
were implemented in Germany.
"A reliable forecast regarding consumption can only be made once
we can predict how long the protective measures to combat corona
will remain in place," Mr. Buerkl said.
GfK uses data from three sub-indexes from the current month to
derive a sentiment figure for the coming month. In March, both
economic and income expectations, as well as propensity to buy are
expected to suffer heavy losses, GfK said.
"Consumers expect very tough economic times ahead for Germany,"
Mr. Buerkl said.
Economic expectations fell to minus 19.2 in March from 1.2 in
February, as the German economy has come to a complete halt in a
very short space of time, GfK said. A lower figure was last
recorded in August 2012, when the indicator stood at minus 20.0
"The threat of significantly reduced hours and an increase in
unemployment figures are now hammering away at consumer sentiment,"
A plummeting economic outlook is also leading to heavy losses
for income expectations, which fell to 27.8 in March from 41.2 in
The propensity-to-buy measure went down to 31.4 points in March
from 53.6 points in February. GfK said this loss of some 22 points
within a single month is a historic one.
GfK pointed out that the survey was carried out between March 4
and March 16 and therefore a large number of respondents were not
yet aware of the closures of businesses and production
Although retail as a whole is facing tough times ahead, GfK
noted that the coronavirus provided drug and grocery stores with a
jump in sales of 14% in February compared to the same month last
year, driven by stock-piling purchase behavior.
"This trend will also persist into March and potentially the
following months, as the 'shut-down' of public life isn't only
leading to stock-piling, but also to a relocation of out of home
consumption to people's private homes, causing an increase of sales
in grocery stores compared to the previous year," said Robert
Kecskes, retail expert at GfK.
Write to Maria Martinez at email@example.com
(END) Dow Jones Newswires
March 26, 2020 03:14 ET (07:14 GMT)
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