German retail sales fell sharply in June, official data showed today, highlighting the nervousness of consumers in Europe's largest economy.
Total retail sales fell 2.8 per cent on the month in June in real and seasonally adjusted terms, preliminary Bundesbank data showed. Compared with a year earlier, sales were down 3.7 per cent, the central bank said on its website.
Earlier, the Federal Statistics Office said that a narrower measure of retail sales - excluding vehicles and turnover at gas stations - fell by a greater-than-expected 1.4 percent on the month, adjusted for seasonal swings.
The 1.4-per cent drop was bigger than even the most pessimistic of projections in a Reuters poll of 19 economists, which gave a mid-range forecast for a fall of 0.5 per cent.
"Uncertainty among consumers is extremely elevated," said Stefan Schilbe at HSBC Trinkaus. He pointed to the high oil price as one factor but said this could ease.
"On the other hand, the decline in unemployment is losing some of its dynamic. Over the medium-term, it should even come to an end. That would be the next factor weighing on growth."
Germany's consumer gloom mirrored weakness across Europe. In Britain, retailer John Lewis said on Friday its department store sales in the week to July 26 fell by 4.5 per cent on the year. In Spain, retail sales suffered a record plunge in June.
The preliminary Statistics Office data showed German retail sales dropped 3.9 per cent on the year in real terms. In nominal terms, sales fell 1.4 per cent compared with May and 1.2 per cent on the year.
"That does not bode well for private consumption in the second quarter," said Postbank analyst Marco Bargel.
The Finance Ministry said last week that German GDP shrank considerably in the second quarter after a strong start to the year, when a rise in private consumption and surging investment helped the economy expand at its fastest rate since 1996.