After starting the year slightly behind total retail sales, the footwear and leather goods index (of the German Federal Statistical Office) returned to the top for the second month in a row. Some companies reported good results in the first quarter of 2024, such as Deichmann, the family-owned shoe retailer based in Essen, which recorded significant growth in its home market. Gross sales in Germany increased by about 9 per cent to just under EUR 2.8 billion in 2023. As the company is increasingly focusing on strong top brands to complement its popular own brands, these positive results reflect on the one hand more expensive models in the range and on the other hand growth in the number of pairs of shoes sold. The group sold more than 70 million pairs of shoes in approximately 1,400 shops in Germany and online.
However, in general, retail sales of shoes in the first quarter of 2024 were lower than last year, with February being the best month of the quarter, but market experts at IFH Cologne and BBE Handelsberatung predict a slow and steady growth of the footwear market until 2028, with the pre-crisis level of EUR 9.9 billion in 2019 to be reached from 2025.
Online sales
Online sales in Germany declined throughout 2023, following a drop in 2022, with footwear among the segments that suffered the greatest decline.
In the German e-commerce landscape, marketplaces such as Temu and Shein accounted for more than half of total online sales.
According to a survey by the German trade association HDE, marketplaces are increasingly gaining market share as consumers increasingly rely on their smartphones to shop. Online sales in fashion and accessories will account for 41.8% of total sales in 2023, down from 42.9% in 2022.
Consumer sentiment
In the first quarter of 2024, the consumer confidence index increased by 7.2 points from minus 17.3 to minus 10.1 points between January and April, exceeding the expectations of most analysts. Falling inflation rates, combined with wage increases in the country, are strengthening the purchasing power of German consumers.
With this in mind and looking ahead, the economy should gain further momentum, as strong wage growth fuels a cautious recovery in private consumption and the inventory cycle should also gradually start to turn positive.
This also has an impact on imports. In January and February 2024, the value of footwear imports increased by 18% and 20% respectively, as a logical consequence of improved retailer confidence. Although export data for March and April are not yet available, the correlation with consumer sentiment suggests that the first quarter of 2024 will show a good rebound compared to last year.
Forecast 2024
In May, the German Council of Economic Experts published its economic growth forecast for the current year. After having started the year with a stagnation outlook, the Council now forecasts GDP growth of 0.2% this year. For 2025, the same report forecasts growth of 0.9 per cent. The German economy is expected to gain some momentum over the course of the year, with inflation falling and nominal wages rising, although consumers tend to remain somewhat sceptical and consumer sentiment is rising only slowly.
