The price-adjusted sales in Germany’s retail sector in October increased by 1.1 percent compared to the previous month, according to preliminary results published by the Federal Statistical Office (Destatis) on Thursday.
Since food prices have been rising at an above-average rate in recent months, there was a particularly noticeable difference between real sales of food, down by 1.6 percent year-on-year, and nominal sales which were up by 4 percent.
“The retail sector is currently facing difficult conditions,” a spokesperson for the German Retail Association (HDE) told Xinhua on Thursday. “Consumer sentiment is not good.”
Inflation in Germany has been normalizing more slowly than in other European countries. The inflation rate in Europe’s largest economy in August still stood at 6.1 percent, but has since declined to 3.2 percent in November, according to the preliminary figures.
The “gradual decline in inflation and rising real wages have hardly improved people’s spending mood so far,” the German Institute for Economic Research (DIW) said on Wednesday in its economic barometer for November.
Germany’s retail association expects nominal sales growth of 1.5 percent for November and December compared to the previous year, which corresponds to a decline in real terms of 5.5 percent. “The outlook for Christmas business is also rather subdued,” the HDE spokesperson said.
Trade union Verdi and the retail association have been negotiating higher wages for wholesale and retail employees for months. However, an agreement has not yet been reached, and strikes during the Christmas season are still on the table. ■