German retail sales figures have shown a significant decline, falling short of market expectations. The latest data indicates a drop of 0.3 per cent, revised from an initial estimate of a 0.3 per cent increase. Year-on-year growth came in at 1.1 per cent, slightly above the anticipated 0.9 per cent. Meanwhile, the previous month’s retail sales have been revised upwards from 0.9 per cent to 1.6 per cent.

Breaking down the figures reveals a 1.9 per cent decrease in food product sales, while the non-food retail sector recorded a modest increase of 0.3 per cent.

Looking ahead, the German statistics office projects retail sales growth of approximately 2.4 per cent in real terms for the full year 2025. This forecast carries a range between 2.3 per cent and 2.6 per cent to account for potential variations. More specifically, retail sales grew strongly in the first half of 2025, by around 3.8 per cent, before slowing to a growth rate of 1.1 per cent in the second half.

The notable surge in sales during the first half of the year is partly attributed to a one-off effect linked to the restructuring of a major online and mail-order company in August 2024, alongside other factors.

For forex traders, these figures suggest cautious sentiment towards the German retail sector with potential implications for the euro. The downward trend in food sales and the deceleration expected in the latter half of 2025 may weigh on consumer confidence and economic momentum.

Original Source: Justin Low of investinglive.com