2024-03-28 21:35:19
Another setback for the German retail sector: sales fell in February. Easter business gives hope for improvement.
German retailers surprisingly took in less money in February. Their sales fell by 1.8 percent compared to the previous month, as the Federal Statistical Office announced on Thursday. Adjusted for inflation (in real terms), there was an even larger decline of 1.9 percent. This is unexpected: Economists surveyed by the Reuters news agency had expected growth of 0.3 percent. Measured as of February 2023, there was a real minus of 2.7 percent, which was more than three times as large as predicted.
“This is a cold shower for any consumer hopes,” commented the chief economist at Hauck Aufhäuser Lamp Privatbank AG, Alexander Krüger, on the development. “Anyone who believes that higher wage agreements will boost private consumption is probably mistaken,” added VP Bank chief economist Thomas Gitzel.
Easter business is a bright spot
However, there is hope for improvement, as an Ifo survey among retailers shows: The barometer for assessing the current business situation rose to minus 7.3 points in March, after minus 18.1 points in February. Business expectations also improved significantly. “The pessimism that prevailed recently is declining,” said Ifo expert Patrick Höppner. “The Easter business was apparently a bright spot for many retailers.”
Food retail sales fell by 1.7 percent in real terms compared to January. Non-food business fell by 1.0 percent. Internet and mail order sales recorded a real sales decline of 2.8 percent.
Despite declining inflation, consumer sentiment in Germany remained subdued until recently. The barometer for the consumer climate in April rose for the second month in a row – but only by 1.4 to minus 27.4 points, as the GfK and the Nuremberg Institute for Market Decisions (NIM) found in their survey. Real income growth and a stable labor market in themselves formed a good foundation: “But consumers still lack planning security and optimism for the future,” said NIM consumer expert Rolf Bürkl.