The Economist Intelligence Unit expects relatively steady growth in retail sales over the forecast period. After an economic slowdown in Germany in 2012-13, activity recovered gradually in the first half of 2014, but has since stagnated in response to a decline in industrial output and sentiment related to the Russia-Ukraine crisis. We expect activity to strengthen gradually in 2015, supported by underlying resilience in the labour market, record-low interest rates and a boost to real disposable incomes from the sharp decline in commodity and energy prices. We forecast real GDP growth of 1% next year and an average of 1.6% in 2016-19.
Household sentiment has weakened recently in line with a slowdown in the broader economy, but consumer fundamentals have strengthened gradually over the past year or so, with the unemployment rate now at a two-decade low and real wages rising. Real retail sales growth is forecast to average a modest-looking 0.3% per year in 2015-19, although this is relatively strong by historical comparison (real retail sales have only expanded in six of the past 20 years).
Reflecting the high market share of discounters, consumers will retain a strong price focus for purchases of staples such as food and clothing. However, spending growth will also be sustained for luxury goods, reflecting robust high-end income gains. A resilient housing market will underpin demand for white goods, while demographic factors-such as an ageing population and rising share of one-person households-will increasingly influence the structure of demand over the forecast period and beyond.

Consumer goods and retail report 2

Overview 2

Retail 3

Food and drink 6

Non-food products 10

Industry publishing schedule 14

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