Berlin, November 27, 2025 – German retailers are bracing for an unusually difficult Black Friday season. A new joint analysis by management consultancy Kearney and AI pricing specialist 7Learnings reveals that recent US tariff increases on Asian imports are diverting significant volumes of goods to Europe. The result: an estimated 11% additional supply flooding the European market at the worst possible time for retailers.
To clear excess inventory, retailers will need to discount even more aggressively and prolong promotional periods. According to model-based calculations from Kearney and 7Learnings, these intensified markdowns will lead to an additional profit decline of approximately €144 million across the Black Friday period. Fashion and consumer electronics will absorb the biggest impact, together accounting for more than €106 million of the losses.
Overall, analysts expect €23 billion in Black Week sales and €2.4 billion in profits in Germany – with profitability deteriorating compared to last year. The findings highlight the mounting price and cost pressures hitting the retail sector.
Expert Commentary
Moritz Tybus, Partner at Kearney:
“An 11 percent oversupply changes the entire price structure. Retailers have to start promotions earlier and offer bigger discounts to achieve comparable sales to the previous year, this squeezes margins in an already strained earnings situation.”
Felix Hoffmann, CEO of 7Learnings:
“Our AI models show that retailers can stay profitable even under immense price pressure, but only when pricing, marketing budgets, and inventory levels are optimised together. Coordinated decision-making, not isolated price cuts, creates the real leverage.”
Global Trade Shifts and Rising Competition
The intensified pressure is not solely domestic. Due to the end of the US de minimis rule for shipments under $800 and rising Section 301 tariffs, many Asian exporters are increasingly shifting their focus to Europe. At the same time, platforms such as Temu and Shein continue to expand aggressively across the EU with low prices and high-frequency marketing.
The European Union has announced measures including a planned €2 delivery fee for small third-country shipments. However, this will not take effect in time to slow down the wave of additional parcels arriving in Europe, many of them just in time for Black Friday.
Advertising Spend Intensifies the Downward Price Spiral
Marketing pressure has surged in parallel. Temu and Shein have increased their digital advertising spend across Central Europe by roughly 30% per month since spring 2025. In some markets, year-over-year increases exceed 100%. Around Singles’ Day and Black Friday, campaign volumes have reached record highs, often accompanied by steep introductory discounts and free shipping.
This aggressive competitive environment forces local retailers to escalate their own promotions – further contributing to the expected decline in profitability.
Dr. Robin Bachmann, Economic Psychologist, FU Berlin:
“Black Friday has evolved into a social ritual. Many consumers now buy simply because everyone else is buying – not because discounts are particularly deep. The psychological momentum amplifies the promotion race even when margins are thin.”
AI-Powered Modeling Behind the Analysis
For this study, Kearney and 7Learnings combined import and market data with AI-based elasticity and pricing models. The scenario simulates the effects of redirected Asian trade flows on European retail markets and quantifies the impact on categories such as fashion and consumer electronics.
The model incorporates real-world data on price developments, advertising intensity, and inventory dynamics across Germany and the EU. It enables detailed insights, for example, estimating how much deeper discounts may need to be or how many additional days retailers may need to extend promotions.
About Kearney
Kearney is one of the world’s leading management consulting firms. For nearly 100 years, executive suites, government agencies, and non-profit organizations have placed their trust in us. Our recipe for success in helping our clients achieve breakthroughs? Our people, with their individual interests and strengths. And our drive not only to put big ideas on paper, but also to implement them.
About 7Learnings
7Learnings provides an AI-powered retail optimization platform for B2C companies, pioneering the overarching optimization of pricing, performance marketing, and product ordering. With 7Learnings’ machine learning algorithm, retailers and brands can predict the impact of pricing decisions, determine the optimal price for all products, and reduce manual labor by up to 80 percent. The solution has been rigorously tested in numerous A/B experiments and consistently delivers measurable performance improvements and profit increases of more than ten percent.
7Learnings was founded in Berlin in 2019 by Felix Hoffmann, Eiko van Hettinga, and Martin Nowak. Its clients include international companies such as Westwing, Bonprix, Tom Tailor, Tamaris, and DK Company.