German retail sales fall for second consecutive month in July
German retail sales dropped for the second straight month in July, declining 0.9 percent sequentially in real terms. It had dropped 1.9 percent in the prior month. However, given the solid recovery in May, the level of sales was still up 4.2 percent year-on-year and 0.9 percent above February’s pre-pandemic level, to leave total sales in the year-to-date 2.6 percent higher than in the same period last year.
Delving into detail, sales of food, beverages and tobacco also rose 4.2 percent year-on-year, while non-food sales rose 4.4 percent year-on-year. There was a considerable variation in the various categories of goods, nevertheless, noted Daiwa Capital Res. Underpinned by the temporary 3 percentage point cut in the main VAT rate to 16 percent, to last from 1 July until year-end, sales of furniture, household appliances and building supplies were up a vigorous 12.9 percent year-on-year in July, albeit only up a modest 1.6 percent year-to-date in the first seven months of the year.
On the contrary, sales of clothes, textiles etc. dropped 8 percent year-on-year to 27.8 percent, while sales of cosmetics and pharmaceuticals dropped 4.1 percent year-on-year in July, albeit still up 1.1 percent year-on-year.