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Restrained spending

May 31, 2012

The German retail sector is experiencing a slight recovery, having posted an increase in revenues for two straight months despite a more negative outlook. But it's still far off its 2011 sales levels.

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Euro banknotes changing hands at the cash desk
Image: AP

Retail sales in Europe's biggest economy rose for the second month in a row in April, official data showed on Thursday. Revenues climbed a moderate 0.6 percent month-on-month in seasonally and calendar-adjusted terms.

Analysts had expected a more modest increase of 0.1 percent in April, following a rise of 1.6 percent in March.

But the Federal Statistics Office painted a gloomier picture when looking at year-on-year figures. Seasonally adjusted, April 2012 sales in the German retail sector slumped by 3.8 percent compared to the same month last year.

Boosted confidence

The most marked drop in revenues was recorded in the food, beverages and tobacco sectors where the year-on-year dip reached 5.9 percent in real terms.

The outlook for the rest of the year, however, is surprisingly upbeat against the backdrop of a full-fledged eurozone currency crisis. The German Retail Federation (HDE) predicted overall revenues for 2012 to rise by 1.5 percent.

It said it expects consumer spending to pick up in the light of positive employment figures and better wage deals in many industries, leaving people with more money to spend.

hg/sms (Reuters, AFP, dpa)