Slight Decline in German Retail Sales During September
The seasonally adjusted Germany Retail PMI posted 49.2 in September, down from 49.9 in the previous month and the lowest reading since April.
September data therefore indicated a marginal drop in like-for-like sales, followed a stagnation during
August and slight growth throughout the rest of the summer. Anecdotal evidence suggested that lower sales in September generally reflected subdued underlying consumer demand.
Although actual sales declined on a month-onmonth basis, retailers indicated that they remained higher than one year earlier. Moreover, the pace of year-on-year sales growth was robust, with around 42% of retailers indicating expansion and only onethird posting a decline.
Actual sales miss targets, but retailers are upbeat about their prospects for October September data indicated that German retail sales were lower than anticipated, and by the greatest extent since January.
This was mainly linked to lower than expected customer footfall. However, for the first time since April, retailers are optimistic about their prospects for sales in one month’s time.
Employment growth eases to only a slight pace Lower retail sales and ongoing pressure on operating margins contributed to a further slowdown in job creation across the German retail sector. The latest increase in staffing levels was only marginal and the weakest recorded so far in 2012. Retailers were also cautious about their inventory levels during September.
The value of goods ordered for resale dropped for the first time in three months and inventories of goods for resale increased at the slowest pace since May 2011.
Wholesale price inflation dips to four-month low Average prices paid by German retailers for their goods for resale increased at a robust pace in September, thereby extending the current period of rising costs to 33 months.
However, the rate of inflation was weaker than the average over this period and the least marked since May. Higher wholesale price nonetheless contributed to a further squeeze on operating margins across the German
retail sector. A decline in margins has been recorded in each month since December 2010, and the rate of contraction accelerated slightly during the latest survey period.
Commenting on the Markit Germany Retail PMIsurvey data, Tim Moore, senior economist at Markit and author of the report said: “September rounded off a difficult third quarter for the German retail sector, with like-for-like sales broadly flat through this period.
“Moreover, the Retail PMI reading in September was the secondlowest for just over two years, suggesting subdued household spending patterns in Germany. Margins
therefore remain under pressure across the sector, and retailers sought to control costs by cutting jobs
growth and reducing inventories at their stores in the latest survey period.”