BERLIN- German retailers ended the first half of 2022 with the sharpest year-on-year sales drop in nearly three decades, as inflation, the Ukraine war and the coronavirus pandemic take their toll, data showed on Monday.
Retail sales in June decreased 8.8 percent in real terms compared with the same month last year, the biggest drop since the time series began in 1994, said the Federal Statistical Office.
Analysts polled by Reuters had predicted a drop of 8.0 percent.
Retail sales also unexpectedly fell compared with the month before: June retail sales fell 1.6 percent in real terms, versus analysts’ predictions of a 0.2 percent increase in a Reuters poll.
Food retail sales in particular saw a decrease of 1.6 percent in real terms compared with the previous month, which is due to higher prices for groceries and an increase in restaurant sales, according to the office.
The German Retail Association left unchanged its forecast for the sector to grow 3 percent in nominal terms in 2022, but rising inflation meant that turnover would shrink by 2 percent in real terms, the body said on Tuesday.
The industry group blamed rising inflation and energy costs and poor consumer sentiment for the outlook. It said brick-and-mortar turnover would grow 1.4 percent in nominal terms and online retail 12.4 percent. Total turnover would hit 607.1 billion euros.
“The Russian war in Ukraine and COVID-19 lockdowns in Asia are interfering with supply chains, inflation is rising and energy costs are hitting unimagined highs,” said HDE head Stefan Genth.
“Rising inflation is massively affecting shoppers.”
