Broad-Based Retail Sales Decline Continues

German December retail sales (ex. motor vehicles) were -1.6% M/M (seasonally- and calendar-adjusted, vs +0.6% cons and -0.8% prior, revised from -2.5%) and -4.4% Y/Y (vs -1.9% cons and -1.2% prior, revised from -2.0%). This is the second consecutive decline on a monthly basis, while the seasonally adjusted index hit the lowest level seen since February 2021.

• For 2023 real retail sales (ex. motor vehicles) fell -3.3% Y/Y (vs -0.7% in 2022) but were still +1.3% higher than pre-Covid levels (2019).
• The December decline was broad-based with food, drinks and tobacco sales declining -3.4% Y/Y in real terms. All major subcategories of non-food retail sales fell on a yearly basis, including furnishings, household appliances and building supplies at -8.7% Y/Y (vs -6.8% prior) and internet and mail order business at -6.8% Y/Y (vs -2.0% prior).
• Looking at 2023 Christmas business through combining indices for November and December to control for shifts, even after accounting for the positive revisions, non-food sales declined -2.8% Y/Y in real terms, confirming the weak picture.
• Overall, the data is suggestive of ongoing weakness in German consumer demand.

MNI, Destatis