Retail sales fell for the second month in a row in Germany, declining 0.8 per cent in October and missing expectations of a 0.5 per cent rise. September's decrease was revised from 0.4 per cent to 0.2 per cent. The latest numbers see a year-on-year decrease of 0.2 per cent, following expectations of a 1.3 per cent rise. October's decline puts retail sales 0.8 per cent lower than the third quarter average.
The only sectors which saw sales increase in the first ten months of 2013, compered to 2012, were food retailers, pharmacies and online retailers. Bookstores and jewellers saw the sharpest declines.
Berenberg's Christian Schulz says the fall goes "far beyond the slight softness" of other survey data seen since the elections in September:
Post-election uncertainty over future policies such as tax rises may have played a role in spending behaviour in October, but the statistical office’s retail sales data are also notoriously volatile and often get revised substantially in later releases. Their relationship with household consumption as a GDP component, which expanded by 0.6 per cent quarter-on-quarter in Q2 and 0.1 per cent in Q3, is loose.Important components of household spending such as car purchases are not included. At this early stage of Q4 data, the series suggests some caution for the growth outlook. But we still expect a strong Christmas shopping season.Surveys suggest much more vigour in the economy in November and the fundamentals for German households to spend more are firmly in place. The coalition agreement signed this week may reduce uncertainty a bit more, although concrete legislation will take some time.