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Global Economy

Retail sales plummet

High inflation is depressing retail consumption. In June, sales in the industry fell by 8.8 percent in real terms compared to the previous year. The Federal Statistical Office announced today that this was the largest decline compared to the same month last year since the start of the time series in 1994. Including price increases (nominal), sales fell by only 0.8 percent.

The authority explained that the difference between the nominal and real results reflects the high price increases in the retail trade, which noticeably affected the consumer climate. According to GfK consumer researchers, high inflation is dampening consumer spending.

More sales at restaurateurs

Sales of food fell to its lowest level since June 2016. The statisticians explained that this decline was probably mainly due to the rise in prices. They increased by almost twelve percent compared to June 2021. The fact that many people are now going to restaurants more often could have had a negative impact on food retail. Sales in the catering industry increased by 8.6 percent in May compared to the previous month.

Sales of textiles, clothing, shoes and leather goods, which had almost reached pre-crisis levels by May, fell by 5.4 percent in price-adjusted terms in June compared to April. Compared to June 2019, sales were 13.6 percent below the pre-crisis level.

Minus also in mail order

Internet and mail order business also posted lower sales in June than in the previous month (minus 3.8 percent). Compared to June 2019, however, sales were still 22.3 percent higher. With the introduction of the tank discount, sales at petrol stations rose by 6.4 percent compared to May, the statisticians said.

A current survey by the German Retail Association (HDE) also shows that the buying mood of Germans has suffered greatly as a result of high inflation. The so-called HDE consumption barometer fell to an all-time low at the beginning of the month. Weak consumer sentiment is also to be expected in the coming months, the association announced.

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