German consumers in grim mood

02 April 2009

BERLIN: Retail sales and consumer confidence have both declined in Germany, Europe's largest economy, as rising levels of unemployment and the broader global economic slowdown continue to exert an impact on the country.

According to figures from the Federal Statistics Office, retail sales fell by 0.2% in February, compared with the slight upturn predicted by 26 analysts surveyed by Bloomberg, following on from a 0.9% slide in January.

The retail industry body HDE predicts total retail sales will drop off by a total of 1% in Germany this year, with a static first six months and then a decline to the end of 2009.

Consumer confidence levels also dropped for the first time in seven months in GfK's April index, falling from 2.5 in March to 2.4 in a survey of 2,000 Germans.

Similarly, perceptions of the country's economic expectations tumbled to –32.8 from –27.9, and income expectations declined from –11 to –11.4.

An index of consumers' "propensity to buy" also decreased from 14.6 to 13.9 for the month, with GfK arguing the "fear of job losses is now becoming the overriding concern, overshadowing the positive effect of the economic stimulus package."

Data sourced from Bloomberg; additional content by WARC staff