Retail sales demonstrate substantial growth, yet corporate optimism wanes
E-commerce and food retail businesses saw a notable boost in sales during August, as reported by German retailers. Data from the Federal Statistical Office (Destatis) highlights a 1.6% increase in sales compared to July, both in real (inflation-adjusted) and nominal terms. This marked a significant improvement from the 1.5% growth in real sales in July, which followed declines in May and June.
The food retail sector saw a 1.9% increase in real sales in August compared to July, and a 2.4% growth compared to the same month the previous year. Non-food retail sales also experienced a 1.1% real sales boost in August and a 1.2% year-on-year increase. Online retail, however, witnessed the most significant growth, with real sales surging by 8.9% compared to July and jumping by an impressive 10.8% from August 2021.
"There's an indication that the consumer engine is starting to gain momentum," commented Chief Economist Cyrus de la Rubia of the Hamburg Commercial Bank.
Ifo Business Climate: Foggy Forecast
Despite the encouraging retail sales figures, the retail sector's Ifo business climate has taken a turn for the worse in September. Companies have reported a pessimistic outlook for the future, with many feeling their situation is less favorable compared to previous months. The Munich-based researchers attribute this to consumers' uncertainty about the economic and political climate, which may negatively impact overall consumer spending for the remainder of the year.
The publication of the August retail sales data was delayed due to IT issues. Destatis, responsible for reporting monthly sales figures, had to suspend the reporting temporarily in June due to difficulties in completing a comprehensive update of the statistics to fulfill the new data requirements set by the EU.
In summary, while August saw an improvement in retail sales, particularly in e-commerce and the food industry, concerns remain about the overall downturn in sales since the beginning of the year, and economic and political uncertainty among consumers.
The improvement in retail sales, notably in e-commerce and food retail, is a testament to the resilience of businesses in the information society. However, the pessimistic outlook of retail companies for the future suggests that the advancement of the information society may not be enough to overcome the challenges posed by economic and political uncertainty.
