FRANKFURT (AFP) — German retail sales plunged by 1.6 percent in October from the previous month, preliminary data showed on Monday, catching economists by surprise and underscoring by how much consumers are tightening their belts as Europe's biggest economy falls into recession.
Analysts polled by Dow Jones Newswires had forecast a gain of 0.7 percent.
A 12-month comparison painted a similarly gloomy picture, with sales falling by 1.5 percent in October from the same month a year earlier, the Destatis statistics service said, compared with an analyst forecast for a 0.7 percent rise.
On Sunday, the retailers association HDE said the Christmas season had nonetheless gotten off to a good start.
"Santa Claus is holding a protective umbrella over retailers," an HDE statement said based on results from the first weekend of holiday sales.
But in the latest survey of German business confidence by the Ifo research institute, it found that "retailers are anticipating a much more negative business development in the coming six months."
Germany fell into recession in the third quarter of the year, and economists expect it to last well into 2009.
In the first 10 months of 2008 meanwhile, retail sales lost 0.4 percent compared with the same period a year earlier, Destatis said.
Its preliminary figures for October were based on results from seven large German states that account for around 76 percent of total retail sales.
Copyright © 2009 AFP. All rights reserved. More »
