German retail sales tumbled 3 per cent in March compared to February and were down 4 per cent on the year in real, or inflation-adjusted, terms, according to preliminary figures from the Federal Statistics Office yesterday.

Private consumption slipped in Germany last year for the first time in two decades, helping slow overall economic growth to 0.2 per cent, the slowest rate in nearly nine years.

"The retail sector is stuck in a downturn. We can't really say whether April will be better. We're hoping for a recovery in the second half of the year, but we are realistic and there are still no signs of a turnaround," Mr Hubertus Pellengahr, spokesman for the HDE German Retail Association said.

The data were below even the most pessimistic forecasts in a Reuters poll of analysts and were the latest in a raft of downbeat data from Germany.

German wholesale sales fell 1.7 per cent year-on-year in March in real terms and fell 3.9 per cent month-on-month.

Industry groups and analysts have called on Chancellor Gerhard Schröder to stick to his plans to reform the economy, saying Germany needs to become more flexible if it is to dig itself out of the mire of stagnant growth.

"A lot depends on whether these reforms to cut labour costs and reduce unemployment are introduced. We need more jobs to get the economy going again," Mr Pellengahr said.

Retailers hopes new shop- opening laws from June 1st will give consumers more time to browse on a Saturday and lift the sector. Retailers can now stay open four hours longer on Saturday to 8 p.m.