In October, retail sales (real, sa, excluding cars/petrol) in Germany rose by 0.7% m/m and declined 0.4% y/y (note that October 2011 had one shopping day less than October last year) from 0.3% and 0.6%, respectively, reported for September (which was revised from 0.3% m/m and 0.6% y/y reported earlier).

The October outcome compares with the market's forecast of 0.1% m/m and BarCap's 0.2% m/m estimate. Looking at the breakdown, retail sales of food, beverages and tobacco fell by 1.0% y/y, while retail sales for non-food items rose by 0.3% y/y.

The uptick in retail sales in October follows the latest indication from the Gfk consumer confidence (which rose to 5.6 in December (preliminary), up from 5.2 in October and 5.4 in November). The ongoing relatively favourable labour market situation (note that German employment is actually at its highest level since the early 1990s) clearly lends support to private spending - and should make a positive contribution to GDP this year.


source: BarCap