German retail sales edge up 0.8 percent in December amid cautious Christmas shopping

German retail sales up 0.8 pct in December

FRANKFURT — German retail sales rose a meager 0.8 percent in December compared with November but were still down from a year earlier, as consumers went about their Christmas shopping with caution, the Federal Statistical Office said Tuesday.

Compared with December 2008, sales were down 2.5 percent, the office said. The results are based on preliminary data from seven German states. Retail sales for the whole of 2009 were 1.8 percent lower than in 2008.

The Statistical Office, based in Wiesbaden, said food, drink and tobacco retail sales for the last month of 2009 were half a percent lower compared with December 2008.

Non-food retail sales were 3.3 percent lower, with textiles, clothes, shoes and leather goods retail sales leading the decline, down 2.2 percent in December compared with the year-ago month.

“The Christmas shopping period still started on a weak note in November,” Alexander Koch, an economist at UniCredit said in a research note.

“But overall, the respectable rise in December sales suggests that German consumers decided to open their wallets to buy presents, despite declining labor income and very high unemployment expectations.”

He said the outlook for private consumption remains subdued at the beginning of 2010, especially as pressure from the labor market and higher energy prices weigh on consumer spending.

“Moreover, the cold winter weather will undoubtedly mean higher heating expenditures. We expect private consumption to contract around 1.5 percent in 2010,” Koch said.

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