German retail sales fall in October due to inflation

It’s reported that the inflation held the Germans back from non-essential goods. Thus, the retail sales figure for October was significantly lower than predicted.

According to analysts' forecasts, retail sales in October should have fallen by 0.6% compared to September. However, the analysts' expectations didn’t come true, the decline amounted to 2.8%. Compared to the same month of the previous year, the indicator dropped by 5.0%.

Thomas Gitzel, chief economist at VP Bank, said the drop in retail sales in October could signal the beginning of a winter recession. He also added that consumers are prioritizing purchases of essential goods. This is what leads to the decline in retail sales.

The figure is expected to continue to decline. The German Retail Association (HDE) states that this will be the largest decline in the last 15 years. Thus, retail sales for November and December will fall by 4% year-on-year on a price-adjusted basis.