German retail sales unexpectedly drop in September

(Sharecast News) - Retail sales in Germany unexpectedly slumped in September, government figures revealed on Tuesday, capping off a weak third quarter for the economy.

Sales in Europe's largest economy fell by 0.8% over the month, according to the federal statistics office Destatis.

This was better than the 1.2% decline seen in August but under analysts' expectations of an increase of 0.5%.

Compared with last September, sales were 4.3% lower, after a 2.3% decline in August and also below the consensus forecast of -4%.

Germany saw big declines in non-food sales in both physical stores and online shopping, with both falling 3.7% on the month - outweighed a 2.2% rise in food sales.

"This caps what was almost surely a quarter to forget for the German consumer, in contrast to the strong performance in France," said economist Claus Vistesen from Pantheon Macroeconomics.

"The decline means that retail sales fell by 1.2% quarter-on-quarter in Q3, consistent with the indication in the advance Q3 GDP report that consumers' spending was a drag on growth."

Vistesen said that rising incomes amid falling inflation could help sales in the fourth quarter "but at this point risks are tilted to the downside".