Editor's note: Edward Appleton is founder of A.I. Appleton Insights and can be reached at eappleton90@googlemail.com.
A few years ago, if you suggested that Germany was a poor country, you would have been laughed at, ridiculed. It could maybe be true at the margins, restricted to certain segments (old people, children), but the mainstream? No way.
Well, things are changing, and not for the better.
Germany is losing its claim to being a wealthy country, the “powerhouse of Europe.”
The infrastructure is creaking, as anyone travelling by Deutsche Bahn will testify to. Pension and health care systems are both on the edge financially. Germany’s demographics are challenging the country’s once-solid social-market-based economy. Digitalization is also an area where Germany is lagging.
Travel through any of the more forgotten areas of Germany – the Ruhrgebiet, for example – and it becomes more tangible. Boarded-up buildings adorned with graffiti. Empty shops. Abandoned sports grounds.
But it’s not just the structurally challenged areas. You don’t have to travel far on the S Bahn in richer conurbations such as Munich, Berlin or Hamburg to see similar problems. Lots of housing stock from the 1950s – grey, unrenovated, graffiti-adorned. To paraphrase a quip used by the once-feted mayor of Berlin: “Poor but not sexy.” From the perspective of someone who has lived and worked in Germany for about 35 years, it’s sad.
And while the German state still has a lower debt level as a percentage of GDP than, say, France, the U.K. or the U.S., impoverishment is very much present at both a personal and municipal level.
Unemployment figures hit a 10-year high in Q1 2025, with 3 million registering as unemployed. Surveys from specialist agency IAB (Institut für Arbeit und Berufsforschung) suggest that it will get worse in the coming months.
The number of companies declaring bankruptcy has reached the highest level since the financial crisis of 2008-2009.
In 2024, 22,400 companies went bust in Germany, an increase of approximately 25% versus the previous year, according to the credit specialist company Credit Reform (Credit Reform - Insolvencies 2024).
More worrying, the number of larger companies employing over 250 people declaring bankruptcy rose a massive 44% versus the previous year.
This has a serious knock-on effect on communities, financially and otherwise, reducing the tax base and impacting on all sorts of social, cultural aspects. Think local municipal swimming pools, or hotels/restaurants dependent on business customers.
Deindustrialization is currently haunting Germany. The percentage of industry jobs considering shifting plants and operations to geographies outside of Germany (likely with lower costs) has shifted radically higher over the past three years: 21% said they were considering moving abroad in 2022, rising to 37% in 2024 according to regular surveys conducted by the DIHK (Deutsche Industrie und Handelskammer).
Energy costs are a massive concern, alongside a perceived out-of-control bureaucracy.
Confidence levels amongst the population are also extremely low – the Consumer Confidence Index measured by Gfk/NIM in February 2025 was at minus -22. It has barely recovered since the pandemic – and a long way from the pre-COVID-19 level of +10.
Roughly one in four Germans have no savings whatsoever, according to a survey carried out by ING Direktbank, sampling 1,000 Germans in December 2023. In a comparison with 12 other European countries from 2019, Germany had the second-highest percentage stating they had zero savings – the U.K. being ranked number 10, France number 9. (Source: ING Savings Study 2019.)
But it’s not just the lowest income-level groups that are affected. Poverty is a palpable mind-set that is spreading upwards, impacting those with disposable income, encouraging them to save, not to spend. For those involved in trying to sell goods, cars and houses, it’s a problem, with price promotions seemingly the only marketing activity that really works, creating a downward spiral.
Change however might be in the offing. Three main reasons worth highlighting:
- There is a new German government expected, CDU/CSU-led, with a focus (amongst other things) on growth, jobs and the economy. The need for urgent action is clear; a mandate has been given.
- There could well be an influx of governmental investment into the economy – the so-called “brake on debt” has been removed. This could result in a boost for consumption, however long the lag effect may be – and a corresponding confidence boost.
- The vibe from the U.S. is shifting in many ways. Like it or not – and many in Europe seemingly do not – the impact of this will hit all European countries, forcing them to wake up. A threat? See it as an opportunity, perhaps. Yesterday’s obsessions may not be the ones to guide a future road map.
But for the mood music to change broadly there will need to be a huge and sustained effort, economic and political, to counter the fatalistic what-can-you-do-about-it? attitude which one so often encounters in German everyday life.
What, if anything, can marketing – or even we humble market researchers – do to help? The topic of a whole different article, so I will limit myself to three common calls to action:
- Listen to all voices, help ensure that all get an equal weighting in research – for example, older age cohorts or those living outside of heavily urbanized areas. Ignore your prejudicial or judgmental viewpoints – something seemingly hard for many in the social sciences or advertising community to do.
- Help brands and companies get back to their true north – the problems they solve in people’s lives. Stress how and where higher-level benefits such as sustainability contrast in a need hierarchy with the most important drivers. For chocolate, for example, get the balance right between immediacy, taste enjoyment and other holistic concerns.
- Innovate or encourage innovation – in thinking, approaches, offerings, products. A sense of mental renewal, a sense of openness, liberation even, often comes by seeing and trying something different. (Not to sound like Tony Robbins!)
Change is indeed needed in Germany. Here’s hoping for an imminent upswing and shift in direction. The country deserves it.