German retailers wriggle out of sales dent | Business| Economy and finance news from a German perspective | DW | 30.04.2012
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German retailers wriggle out of sales dent

Retailers in Germany have rebounded from a weak start into the new year with a marked rise in revenues in March. Private households are expected to spend even more in the months ahead due to wage hikes.

German retail sales rose by 0.8 percent in March month-on-month, the Federal Statistics Office (Destatis) announced on Monday. The figure came adjusted for price and seasonal factors and marked the biggest rise since June 2011.

On a 12-month basis, revenues increased by 2.3 percent, but not by enough to offset the decline seen in the preceding two months of the current year.

Supermarkets and groceries posted a 4.2-percent surge in sales, while stores selling cosmetics as well as pharmaceutical and medical items only booked a 2.5-percent rise in revenues.

Robust labor market

"The modest rebound did not make up for a weak showing in January and February and left the first-quarter average level of retail sales about 1.0 percent lower than in the fourth quarter of last year," Barclays Capital economist Thomas Harjes told AFP new agency.

Analysts said high fuel prices and continued uncertainty over the euro area's debt crisis remained risk factors for the rest of the year. "However, in view of sound fundamentals such as a strong labor market and low interest rates, we still expect household consumption to become a major driver of growth later in 2012," Harjes said.

This optimism seems justified, given the prospect of higher wage agreements for employees in many sectors. The German Retail Federation (HDE) expects sales to rise by 1.5 percent throughout 2012.

hg/nk (dpa, AFP, Reuters)