Nominal retail sales went up 3.6 percent at the same time, but were outgrown by high inflation. “The difference between nominal and real results reflects the significant increase in price levels in the retail sector,” Destatis said.
BERLIN, July 31 (Xinhua) — Sales in the German retail sector fell by 4.5 percent year-on-year in price-adjusted terms in the first half (H1) of 2023, according to preliminary figures published on Monday by the Federal Statistical Office (Destatis).
Sales at specialist food retailers, such as butchers and bakeries, fell particularly sharply in the first six months, by 9.3 percent. Internet and mail order sales also saw a sharper than average drop of 7.3 percent.
Nominal retail sales went up 3.6 percent at the same time, but were outgrown by high inflation. “The difference between nominal and real results reflects the significant increase in price levels in the retail sector,” Destatis said in a statement.
German consumer prices are normalizing more slowly than elsewhere in Europe. While inflation in the European Union’s (EU) largest economy is only expected to slow to 6.2 percent in July, inflation in the eurozone is expected to fall to 5.3 percent, according to the respective statistical authorities.
Inflation continued to more than offset wage growth in Germany at the beginning of 2023, causing real wages to fall by 2.3 percent year-on-year, according to official figures.
As consumer sentiment is expected to remain at a low level in the coming months, private consumption would “not be able to make a positive contribution to overall economic development,” Rolf Buerkl of the market research institute GfK said last week.
After two quarters of economic contraction, Germany’s gross domestic product (GDP) stagnated in the second quarter (Q2) of 2023, according to preliminary figures published by Destatis. The official figures for the final quarter of 2022 and the first quarter of this year were just corrected upwards to 0.4 percent and 0.1 percent, respectively.
“There are slightly positive trends in private consumption and investment, but this is not enough, and it is anything but satisfactory,” Minister for Economic Affairs and Climate Action Robert Habeck said on Friday.
In view of persistently high inflation, the German Retail Federation (HDE) has already lowered its forecast for the year 2023 as a whole and expects sales to fall by 4 percent year-on-year instead of 3 percent.
“Consumers are observing the price changes and adjusting their shopping behavior. They often buy less, and in many cases they switch to cheaper products,” HDE Chief Executive Officer (CEO) Stefan Genth said at the end of June.