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Setback for German retailers

March 2, 2012

Retail trade in Germany experienced a dent in January with market players unable to reach performance levels of a month ago. But the moderate decline hasn't severely dampened expectations.

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Image: picture-alliance/dpa

German retail traders suffered a weak start in 2012 and were unable to match their December performance.

The sector's turnover dipped one percent in January month-on-month (1.6 percent in seasonally adjusted terms), the Wiesbaden-based Federal Statistics Office (Destatis) reported on Friday. It meant the third consecutive monthly decline in sales.

Adjusted for inflation, real turnover dropped by 1.6 percent, the strongest decrease since May 2011.

But on a year-on-year basis, January 2012 appeared in a far better light for German retailers. They were able to post a 3.5 percent increase in turnover, compared with January 2011 levels.

Unabated optimism

But the available data are slightly distorted, because consumers in January of this year had one day more to shop than they did last year.

Specialist stores logged the strongest rise in sales year-on-year with a turnover increase of 5.4 percent, followed by online and mail-order businesses, which posted a 5.1 percent hike in revenues.

Despite the slow start in 2012 - and in spite of the ongoing eurozone debt crisis and soaring energy costs - German retailers have preserved their optimism for the months ahead. According to a survey conducted by the German Association of Retail Trade (HDE), turnover is expected to grow by 1.5 percent throughout the current year.

Retail traders base their assessment on strengthened consumer confidence in the country. They hope that people's buying power will increase through collective wage bargaining deals, with the trade unions currently demanding pay hikes between five and seven percent.

hg/ar (dpa, Reuters)