Seasonally adjusted real sales:

October: +2.3% m/m, -0.7% y/y

MNI survey median: +1.3% m/m, +1.5% y/y
MNI survey range: +0.5% to +2.2% m/m

September: -1.8% m/m, +0.9% y/y (revised from -2.3%/+0.4%)
—

FRANKFURT (MNI) – Retail turnover in Germany recovered more than
expected in October after two months of decline, leaving sales at a
three-month high, the Federal Statistical Office reported on Wednesday.

Forecasts had unanimously pointed to a recovery in the monthly
retail sales figure, but even the most optimistic forecast had
underestimated its magnitude. Still, retail data should be taken with a
pinch of salt, since they are among the most revised figures published
by the statistics office.

Retail sales jumped 2.3% from September to October in adjusted
terms, undoing the losses suffered over the previous two months. Base
effects, however, left turnover down 0.7% on the year.

Disaggregating the annual figure, food, drink and tobacco sales
slipped 2.4% compared to October 2009, while non-food sales were up 0.5%
over the same period.

The Christmas season is likely to breathe additional life into the
retail sector, while forward-looking indicators point to a sustained
positive trend.

Retailers polled for Markit Economics’ latest purchasing managers
index (PMI) survey reported a significant boost in sales for November,
lifting the indicator to a four-month high of 55.2.

“The latest retail PMI data add to an increasingly compelling body
of evidence which suggests that the export-led manufacturing recovery is
spilling over to the wider economy,” said Markit economist Tim Moore.

“With retailers reaping the benefits of a stronger labour market
and steadily improving job security, Germany’s economic recovery has
moved into a more mature phase and is looking all the more impressive as
every month goes by,” Moore added.

Earlier this week, the statistics office reported that the number
of employed rose in October to its highest level since reunification,
while the Labour Agency noted that the number of jobless continued to
fall in November.

“The strong growth outlook for 2011 and 2012 will translate into
further falls in unemployment,” the European Commission said on Monday.
This bodes well for consumption and, by extension, for retailers.

Supporting this assessment, the GfK Group reported that the robust
labour market and rising income expectations led to a rebound in
consumers’ propensity to spend in November.

“The prospects of an improved financial situation and dwindling
fears of job losses mean that consumers are becoming more prepared to
open their wallets once again,” GfK said. “This is unquestionably good
news in light of the imminent Christmas period.”

Retailers’ revised up both their present and expected business
situations last month, the Commission’s monthly survey showed. As a
result, German retail sentiment rose to its highest level in over 19
years.

— Frankfurt bureau: +49 69 720 142; email: frankfurt@marketnews.com —

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