Energy costs squeeze the family budget, not fashion prices
The shift happened against a tense macroeconomic backdrop. German inflation reached 3.3% in September 2026, with energy as the main driver. In August, fuel was more than a quarter more expensive than a year earlier, while clothing and footwear prices rose only marginally.
In other words, it is not fashion that became more expensive. It is everything around it. Families compensate by spending more carefully on items like school clothing, where cheaper alternatives are close at hand.
The retailers’ own trading updates point the same way. KiK’s management describes customers as highly price-sensitive and willing to switch. The mainstream chains, by contrast, are struggling: H&M reported only 1% sales growth in local currencies for June to August, with fewer stores than a year earlier, and C&A has recently closed further locations in Germany.
Back to school is a stress test for the family budget. This year, families did not stop buying school clothes. But they did switch retailers. The value chains close to home won, and not only among typical discount shoppers. For mainstream retailers, the challenge is that their customers already know the alternative, so there is little holding them back from switching.
What this means for fashion retail in Germany
Three structural observations stand out:
- Value fashion wins back to school. KiK, Ernsting’s family, Takko Fashion and NKD gained visit share, while C&A, H&M, Mango and Zara lost ground. Primark, the one value retailer built on city-centre stores, remained stable but did not benefit from the switching: proximity mattered as much to shoppers as price.
- Retailer reach was decisive, not loyalty. The shifts in visit share came from more or fewer families entering a store, not from changes in visit frequency.
- The trade-down reaches beyond discount shoppers and leaves mainstream chains exposed. Ernsting’s grew fastest among families who rarely shop at grocery discounters. Mainstream shoppers in the clothing market already combine their visits with value chains. That leaves C&A and H&M exposed if energy costs keep household budgets under pressure.
The analysis shows how quickly macroeconomic pressure translates into measurable shopping behaviour. Behavioural data reveals not only who wins, but also in which regions and with which shoppers.