Germany’s Federal Statistical Office (Destatis) has announced provisional data on retail sales for March.
Accordingly, seasonal and calendar adjusted real retail sales decreased by 2.4 percent in March compared to the previous month. Sales decreased by 8.1 percent compared to the same period of the previous year. under left.
While retailers in the country are suffering from high inflation, which has reduced the purchasing power of many customers, the markets were expecting the said sales to increase by 0.4 percent month on month in March.
Destatis reported that the demand for food products was low in March, while retail sales of these products decreased by 10.3 percent in real terms compared to March 2022.
“This is the strongest decline in annual sales this year when records began to be kept in 1994,” said Destatis in a statement.
The statistics agency cited the fact that food prices were 22.3 percent more expensive in March than the previous year, as a reason for this.
Food inflation three times higher than average in March
“Food inflation in March was three times higher than the general inflation rate,” according to Destatis.
Meanwhile, non-food retail (textiles, clothing, shoes and leather products) sales decreased by 7.2 percent year on year in March.
In Germany, the retail sector is feeling the effects of unusually high inflation and low consumer sentiment, while economists predict prices will rise faster than reworked wages. Thus, employees are threatened with real wage losses for 4 consecutive years.
Worried that stores will close
Hauck Aufhauser Lampe Privatbank Chief Economist, Alexander Krüger, stated that retail sales in Germany are clearly in a downward trend and said, “Retail will continue to have difficult times due to high inflation.”
On the other hand, the German Retailers Association (HDE) is worried that stores will close as costs increase due to high inflation. HDE predicts that around 9,000 retail businesses will close this year.