German retail sales held steady month-on-month in real terms in January despite fears of a drop due to a harsh winter, but fell for a sixth straight month on an annual basis and the outlook remains weak.
Sales fell 3.4 percent year-on-year, data from the Federal Statistics Office showed today. The preliminary figures compared with Reuters consensus forecasts for a fall of 0.5 per cent on the month and an annual drop of 1.1 per cent.
In December retail sales were up 0.9 percent month-on-month but down 1.8 per cent year-on-year as Germany crawls out of its deepest recession since World War Two, while combating the threat of rising unemployment.
The data were based on sales from seven states accounting for some 76 per cent of total retail turnover.
In nominal terms, sales rose 0.1 per cent month-on-month but fell 3 per cent year-on-year.
The HDE retail association told Reuters last week the sector is in for a tough ride in 2010 and possibly in 2011. It expects retail sales to stagnate in nominal terms this year after a 1.6 per cent drop to 392 billion last year.
Germany emerged from recession in the second quarter of 2009, but its recovery stalled in the fourth quarter as weaker consumption and investment offset firmer exports. The economy contracted by a post-war record 5 per cent in 2009 and unemployment has climbed slowly.
The retail industry -- which accounts for some 23 per cent of Germany's gross domestic product -- is highly dependent on the labour market and tends not to feel the benefit of an economic recovery until domestic industries pick up.
Reuters