German retail sales unexpectedly fell in September, suggesting consumers are still holding back from buying despite a sales tax increase due on January 1st which will make goods more expensive in Europe's largest economy.
Preliminary Federal Statistics Office data showed today that sales fell by 1.7 per cent in real and seasonally adjusted terms in September compared with the previous month.
The weaker than expected figures helped to push euro zone government bond futures slightly higher when they opened.
Compared with the same month a year earlier, sales fell by 1.2 per cent in real terms in September, the Office said. The mid-range forecast of analysts polled by Reuters was for retail sales to rise by 0.5 per cent on the month and to increase by 2 per cent on the year.
DekaBank economist Andreas Scheuerle said the data were a huge disappointment, but the real impact of the VAT hike on sales would likely come in November and December.
"It looks as if retail sales just can't get going and if it does then it's due to the value-added tax hike," he said. Germany's leading retailer Metro AG said today that the start of the fourth quarter had been solid.
However, it noted that domestic sales in the third quarter had been slightly short of levels reached a year ago.