Seasonally adjusted real sales:

April: +1.0% m/m, -3.1% y/y

MNI survey median: +0.8% m/m
MNI survey range: +0.5% to +3.3% m/m

March: -1.6% m/m, +3.7% y/y (revised from -2.4%/+2.7%)
—

FRANKFURT (MNI) – Retail sales in Germany recovered more than
generally expected in April, while March’s figures were revised upwards,
the Federal Statistical Office reported on Tuesday.

On the month, turnover rose 1.0% in real terms following March’s
1.6% decline, leaving sales up 0.45% compared to 1Q.

On the year, sales were still down 3.1%. Disaggregating the figure,
food, alcohol and tobacco sales were down 2.8% since April 2009, while
non-food sales decreased 3.0%.

With inflation expected to rise and weakening income prospects
hurting households’ purchasing power, consumers continue to revise down
their propensity to spend, the GfK Group reported last week.

Such developments likely contributed to the growing pessimism in
the retail sector. According to Ifo institute’s latest survey, retailers
were much less satisfied with business in May and slightly less
confident at the six-month horizon.

Retailers polled by the European Commission were also more
pessimistic in May, with their assessment of both the current and
expected business situations losing ground.

Retailers cited in Markit Economics’ purchasing managers index
(PMI) reported a dip in sales in May, leaving the indicator (48.5) below
the no-change level for two years, the longest stretch since the series
began. Firms also noted the sharpest increase in purchasing costs in
nearly a year and a half, extending the rise to five months.

However, the PMI respondents appeared notably more upbeat regarding
the future than in other surveys. “Retailers expect the forthcoming
football World Cup to provide a short-term boost to sales and, looking
beyond this, there are hopes that stabilising labour market conditions
will support household demand,” said Markit economist Tim Moore.

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

[TOPICS: M$G$$$,M$X$$$,MAGDS$,MT$$$$,M$XDS$]