German retail sales unexpectedly slide in December

(Sharecast News) - Retail sales in Germany unexpectedly declined again in December, according to data released on Wednesday by the federal statistics agency Destatis.

Sales dropped by 1.6% during the last month of 2023, surprising economists who had pencilled in a rebound of 0.7% following a 2.5% decline in November. Compared with December of 2022, sales were down 1.7% after a 2.4% annual fall the month before.

Food sales in real terms were down 2.8% during the month while non-food sales fell by 1.6%.

However, economist Melanie Debono from Pantheon Macroeconomics noted: "Some of this is down to the seasonals which have been quite aggressive in recent months; the adjustment in December was around 2pp higher than its average in the past seven years, which suggests that the statistics office is now adjusting more heavily for Christmas boost to December sales."

Nevertheless, Debono said that December's outcome means that retail sales declined 0.4% in last three months of 2023, falling for the second straight quarter.

"Over the year as a whole retail sales were down by 3.1%, more than DESTATIS had assumed in January, according to the press release, which means we cannot rule out a downward revision to the already-abysmal GDP outcome for 2023," Debono said.