Fashion pulse: Germany - March 2026

At the start of 2026, the German fashion market presents a mixed picture of moderate growth, slightly rising prices and noticeably dampened consumer sentiment. Current data from the Federal Statistical Office (Destatis) and other institutions provide insight into the development of consumer prices, retail sales and key macroeconomic indicators.

It should be noted that the underlying figures are based on different reporting periods. While price data and sentiment indicators are already available for March, retail sales figures are reported with a time lag. This is due to collection and publication cycles, meaning the data in this case still refers to February. This staggered timing is standard and still allows for a reliable assessment of current market trends.

Consumer prices (March)

In March, fashion prices in Germany rose by 1.3 percent year-over-year, as reported by the Federal Statistical Office (Destatis). Childrenswear recorded the sharpest increase at plus 2.5 percent, followed by accessories at plus 3.7 percent. Womenswear footwear remained almost unchanged at plus 0.1 percent, the only fashion category close to deflation. Menswear rose moderately by 0.7 percent, while menswear footwear increased by 2.4 percent.

The overall inflation rate during this period was 2.7 percent.

Retail sales (February)

The broader fashion retail category, which includes textiles, clothing, footwear and leather goods, grew by 0.5 percent in real terms and 1.5 percent in nominal terms in February, according to Destatis' monthly retail statistics. The difference suggests that approximately one-third of the sales growth is attributable to price increases rather than additional volume.

Clothing stores were the strongest performers, with a volume increase of 1.8 percent and a nominal increase of 2.9 percent. This outperformed the entire German retail sector, which grew by only 0.8 percent. Watches and jewellery stood out with a nominal increase of plus 9.4 percent. However, volume growth was more moderate at plus 2.7 percent, indicating significant pricing power in the luxury accessories segment.

Footwear and leather goods stores recorded a 2.0 percent decline in volume, with nominal sales also falling by 1.4 percent. Textile stores performed the weakest with a real-term decrease of 5.0 percent, continuing their long-term structural decline. Market stalls selling fashion saw a slight recovery with a volume increase of 2.2 percent.

E-commerce and mail order grew by 2.5 percent in real terms, according to Destatis. With an index value of 179.4 against a baseline of 100 in 2015, it remains by far the fastest-growing channel. Brick and mortar retail, at just 96.2, continues to be below its 2015 volume level.

Macroeconomic environment (March)

Consumer confidence fell significantly to -13.5 from -9.9 in January, according to the European statistical office Eurostat.

The GfK consumer climate index is based on data collected by the German market research institute and analysed in collaboration with the Nuremberg Institute for Market Decisions (NIM). According to consumer expectations, the index is set to fall to -28.0 points for April 2026, its lowest level since March 2024. This represents a month-on-month decline of 3.2 points.

Unemployment fell slightly to 3.02 million, according to the Federal Employment Agency, but remains higher year-over-year. The Eurostat rate is 4.0 percent, compared to 3.6 percent a year ago. The euro averaged 1.156 dollars, an increase of 7.0 percent year-over-year according to the European Central Bank (ECB). This reduces import costs for retailers sourcing from dollar-denominated markets.

Conclusion

German fashion retail is experiencing moderate volume growth, while consumers are faced with declining confidence. The significant drop in sentiment, with the GfK consumer climate at -28 and the Munich-based Ifo Institute's business climate index at 86.4, points to a challenging second quarter. The silver lining is that a stronger euro is easing import costs. Additionally, clothing inflation at plus 1.3 percent is well below the overall inflation rate of plus 2.7 percent. Fashion is therefore gaining relative value for price-conscious consumers.