* Retail sales likely strongest since 2004 last yr-Stats
* November sales drop but likely to be revised upwards -
* Private consumption still set to support German economy
By Sarah Marsh
BERLIN, Jan 5 German retail sales fell 0.9
percent on the month in November but the Federal Statistics
Office said that figure would probably be revised after a
bullish Christmas that may have helped sales to their fastest
full-year growth since 2004.
Retail sales likely rose between 1.1 and 1.3 percent in real
terms in 2011, and between 2.7 and 2.9 percent in nominal terms,
the Office said in an initial estimate, pointing to strong
private consumption that is offsetting a decline in external
trade for Europe's largest economy.
"Record employment, cheap financing conditions and the weak
incentives to save due to lower interest rates are helping
retail sales," said Stefan Schilbe at HSBC Trinkaus. "In
addition oil prices no longer rose in the second half-year."
"As long as the labour market does not worsen considerably,
consumption will continue to support the economy," he said.
The notoriously volatile indicator dropped 0.9 percent on a
monthly basis in real terms, missing expectations in a Reuters
poll of economists for an unchanged reading and suggesting
consumption was not immune to the euro zone crisis.
It was bang in line with forecasts for a 0.8 percent rise
year on year.
German DIY store operator Praktiker said on Thursday its
fourth quarter sales were down 4.5 percent.
But Germany's HDE retail association has said retailers saw
a strong finish to the Christmas season with turnover for the
period expected to be 1.5 percent above year-ago levels.
The Statistics Office said it would probably revise up the
preliminary figure, and analysts said they expected stronger
retail sales data for December due to upbeat reports on
"An improvement should be on the cards," said Christian
Schulz at Berenberg Bank. "The fall in retail sales in November
may thus be revised upwards later, and in any case is likely to
be followed by better December data."
The HDE also said it expected full-year 2011 turnover to be
up 2 percent.
Berenberg's Schulz said other factors should support
consumption this year: "The labour market has improved further
and the rebound in confidence indicators has accelerated."
Data earlier this week showed unemployment falling more than
expected in December, with the jobless rate falling to the
lowest level since the unification of Germany two decades ago.
Furthermore German consumer morale unexpectedly held steady
going into January, as income expectations and views of the
The deepening euro zone debt crisis and a global slowdown
are set to hit exports and investor confidence, reducing German
economic growth to around 0.5-1.0 percent this year from some 3
percent in 2011.
October retail sales were also revised to a drop of 0.2
percent on the month, from a previously reported gain of 0.7
percent. Sales on an annual basis were revised downwards to -0.6
percent from -0.4 percent.