SHAFAQNA – German retail sales will climb by 1.5 percent in nominal terms to around 466 billion euros (350.25 billion pounds) this year after increasing by 1.9 percent in 2014, Germany‘s HDE retail association said on Friday. HDE said consumers were likely to benefit from a strong labour market and rising wages, while they also had little incentive to save due to low interest rates.
German consumer sentiment surged to its highest level in more than 13 years heading into February, a survey showed on Wednesday, as lower oil prices meant shoppers in Europe’s largest economy had more spare cash.
Private consumption helped drive a 1.5 percent increase in gross domestic product in 2014 and is expected to boost growth this year too, especially as consumers benefit from cheaper oil.
“Income stability is driving consumption – people are treating themselves again,” said HDE managing director Stefan Genth.
HDE’s figures can differ from official data released by the Federal Statistics Office as they include different branches of retail. The official data showed earlier on Friday that nominal retail sales were up by 1.7 percent last year, their fifth consecutive annual rise. In real terms they also posted their biggest yearly increase in 2-1/2 years in December.
HDE said online sales would be the main bright spot and forecast they would rise by 12 percent to almost 44 billion euros.
Christmas business increased by around 1.1 percent to around 85 billion euros, with warm weather in November preventing a steeper rise as people did not buy winter clothes.
Data on Thursday showed annual inflation in Germany turning negative in January for the first time since the height of the global financial crisis in 2009, largely due to lower oil and food prices.
But Genth said he did not see any signs of deflation in the retail sector and instead expected retail prices to rise by 0.6 percent this year after increasing by 1.4 percent in 2014.