German Retail Sales Recover In December

Sponsored Links

German retail sales recovered at the end of 2009 as consumers spent more during Christmas, official data showed Tuesday.

Retail sales turnover was 0.8% larger in December compared to the previous month, provisional data from the Federal Statistical Office revealed. That compared to a revised 1.7% fall in November and the consensus forecast of 0.9% growth for December.

According to data available from seven Länder, annual decline in real turnover was 2.5% in December, the same rate of decrease as in November. The rate also matched economists' expectations. The decrease for November was revised from 2.8%.

Retail trade in food, beverages and tobacco fell 0.5% from a year ago and non-food sales were down 3.3%. At the same time, clothing and footwear sales decreased by 2.2%.

In 2009, retail turnover decreased 1.8% in real terms following a 0.1% drop in 2008. At the same time, nominal turnover dipped 2.4%, reversing the 2.2% growth in the previous year.

ING Bank economist Carsten Brzeski noted that the strong winter weather would discourage German consumers from continuing their spending in January. He pointed out that the fear of becoming unemployed reached the lowest since early 2008 and pent-up demand remains high. Also, households' disposable incomes have improved somewhat due to wage increases and tax relief. The economist still sees some room for positive surprises.

The Federal Ministry of Economics and Technology had raised its GDP outlook to 1.4% for this year from 1.2%. The German economy contracted 5% in 2009. The ministry forecast private consumption to drop 0.5% after an increase of 0.4% last year as unemployment is set to rise.

According to Commerzbank analyst Simon Junker, the retail sector will not fare much better in the months ahead. Citing the weak wholesale figures for the fourth quarter, moderate pace of recovery in the industry recently and today's figures, the analyst said the economy will most likely have expanded only slightly.

The wholesale turnover in real terms decreased 5.4% year-on-year in the fourth quarter, compared to the 8.8% fall in the third quarter. In December, wholesale sales dropped a calendar and seasonally adjusted 3% on an monthly basis, in contrast to a 2.3% growth in the previous month and for the whole year of 2009, sales decreased 8.2% compared with 2008.

German retail sales recovered at the end of 2009 as consumers spent more during Christmas, official data showed Tuesday. (Market News Provided by RTTNews)