German retail sales see surprise fall in August

| October 1, 2010 | 0 Comments
German retail sales see surprise fall in August

Germany’s National statistics office, Destatis, today revealed a surprise fall in retail sales for the month of August.

According to Destatis, retail sales in the euro zone’s largest economy fell 0.2% on the month - representing the second consecutive monthly fall, after July’s drop of 0.4%.

The biggest falls were seen in food and drinks, which lost 2% on an annual basis, while non-food sales grew 5.3%.

However, on an annual basis, retail sales grew 2.2%, albeit smaller than the 3.4% increase expected by economists.

The figures suggest that household demand remains weak, despite a fall in unemployment.

Carsten Brzeski at ING comments: “Despite the continuous strengthening of the labour market, improving consumer confidence and even increasing willingness to spend, German consumption is not really starting up.

“Today’s numbers are a painful reminder that traditional savers and bargain hunters cannot easily be turned into big spenders.”

In related news this week, consumer confidence in Germany surged, according to the GfK research group.

GfK said its latest German consumer climate indicator forecasted a value of 4.9 in October, following a revised reading of 4.3 in September.

The forward looking indicator, which questioned around 2,000 people, was ahead of economists’ forecasts of 4.2.

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