German retail sales dive
October 31, 2014Turnover generated by German retailers experienced the biggest drop in September in over seven years, the National Statistics Office (Destatis) reported Friday.
Revenue decreased by 2.9 percent month-on-month, after rising by 1.5 percent in August. In real terms - that is adjusted for price fluctuations - there was an even deeper fall of 3.2 percent in the month under review.
The sale of textiles, shoes and leatherwear appeared particularly sluggish in September, easing by 5.7 percent month-on-month. By contrast, the statistics office logged an 8.2-percent increase in turnover from pharmaceutical and medical products.
Mixed response
We knew we'd have to brace for a drop from August levels," Nordea Bank economist Holger Sandte told the Reuters news agency. "But nobody had expected a drop that sharp, which does not bode well and fuels recession fears."
The retailers' lobby organization HDE was less pessimistic, saying it stuck to its full-year target of 1.5-percent growth, drawing confidence from a robust German labor market, record-low interest rates, rising wages and low inflation.
Berenberg Bank's Chief Economist, Christian Schulz also believed the September drop would be reversed soon.
"We've had a mild fall so far, meaning winter collections haven't exactly been selling like hot cakes," Schulz remarked. "But this will change rapidly in the coming months, offsetting previous losses."
hg/ng (Reuters, dpa)