German retail sales register surprise 2.4% fall in March

Germany reported a surprise fall in retail sales in March, according to official data released on Tuesday.

The Federal Statistics Office said retail sales fell by 2.4% in March from the previous month and against expectations of a 0.4% rise. Sales were down 8.6% year-on-year in real terms.

“Consumers’ spending in Germany remained under pressure at the end of Q1, consistent with last week’s advance GDP report pointing to zero growth in the first quarter. We doubt the downside surprise in the March retail sales report will lead to any revisions,” said analysts at Pantheon Macroeconomics.

“Back in the retail sector, meanwhile, food sales fell by 1.1% on the month, while non-food sales slipped by 2.3%, with online sales sliding by 8.4%. High prices remain a drag on the inflation-adjusted volume of retail sales, but nominal sales have been falling for a while too, pointing to a more general retrenchment in household consumption.”

"Nominal sales fell by 1.3% in March. Overall, the volume of retail sales fell by 1.4% quarter-on-quarter in Q1, improving slightly from a 2.2% slide in Q4. We think a slow recovery will begin in Q2, as inflation eases and consumer confidence rebounds. We look for stabilisation, and a rebound, in the volume series in the next three-to-six months as inflation cools.”

Reporting by Frank Prenesti for Sharecast.com