Retail sales fell 8.8% in June, the biggest since 1994, as the effect of inflation on product prices is now felt.
According to the Federal Bureau of Statistics, sales fell 8.8% in June from the same period in 2021, with prices adjusted for real increases. If only nominal prices are calculated, the decline in sales shrinks to 0.8%. The difference between nominal and real prices, the Service clarifies, also reflects the increase in inflation, which ultimately reduces consumer spending.
The decline in sales in the clothing and footwear sector reached 5.4%, while online sales, which had soared in previous years, are now also in the red. The reduction reached 15.1%.
“The sharp downturn in consumer sentiment can be attributed to the growing uncertainty in energy supply and price developments in recent weeks,” announced the German Retail Association (HDE), while HAL private bank chief economist Alexander Kruger said particularly pessimistically. “The bad news for retail doesn’t end here. Due to poor consumer sentiment, sales will continue to decline. Consumers are facing serious real income losses,” Mr. Kruger said, predicting that consumers’ willingness to buy will depend from the charge on natural gas. “We have not yet reached the bottom of consumption,” the economist warned in a report to the bank’s clients.
Source: Capital
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