Analysis: Surprisingly positive October retail sales, but Christmas business expectations subdued

Analysis: Surprisingly positive October retail sales, but Christmas business expectations subdued

According to a report by www.tagesschau.de,

The current retail figures for October show surprisingly positive sales, but are accompanied by subdued expectations for the Christmas business. Despite the positive outlook for retail, traders are concerned about the upcoming holiday season, which will be weighed down by economic uncertainty and rising prices.

German retail sales increased unexpectedly significantly in October, both adjusted for price increases (real) and including price increases (nominal). Analysts were surprised by the strength of the increase, especially after weak sales development in the summer months.

However, inflation is putting a strain on retailers, particularly in the food trade, where sales have fallen in real terms over the year. The non-food business and internet and mail order sales also recorded varying sales growth.

Despite the positive sales in October, the outlook for Christmas business is bleak. The industry association HDE expects an increase of 1.5 percent, but if one excludes increased prices, the real decline is of 5.5 percent. The dealers expect worse or significantly worse sales than in the same period last year and blame the economic effects of the Ukraine war and rising inflation as well as the declining mood to buy.

The impact of this development could have a negative impact on retail and the economy as a whole, as retailers view the upcoming holiday season as the busiest period of the year. A dampened buying mood and a decline in sales could lead to further economic challenges.