German retail sales slip 0.2 percent in August

1st October 2010, Comments 0 comments

A surprise fall in German August retail sales put a question mark Friday over the strength of a recovery in consumer spending following a weak showing in July.

Retail sales were down 0.2 percent in August, the national statistics office said, after a revised, seasonally-corrected 0.4 percent slide in July.

Analysts polled by Dow Jones Newswires had forecast an increase of 0.5 percent for August.

Compared with a year earlier, retail sales in Europe's biggest economy gained 2.2 percent, the Destatis data showed.

Despite a continued economic rebound encouraging lower unemployment and a rise in consumer sentiment, shoppers are nonetheless still slow to dig out their wallets and purses.

"Today's numbers are a painful reminder that traditional savers and bargain hunters cannot easily be turned into big spenders," ING senior economist Carsten Brzeski said.

The biggest declines were seen in food and drinks, which lost 2.0 percent on the year, while non-food sales gained 5.3 percent, including the largest increase in textile sales on record.

In the first eight months of the year, retail sales gained 0.9 percent from the same period of 2009.

The medium-term measure is considered more reliable than monthly data, which are often revised.

On Tuesday, the GfK research institute said its survey of consumer confidence had reached a three-year high owing in large part to steady improvements in the labour market.

Last week, the German retail federation HDE estimated the sector would perform well this year, with a 1.5 percent increase in nominal sales, compared with its previous forecast for no change.

© 2010 AFP

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