German retail sales fall more than expected in October

By Maria Martinez

(Reuters) -German retail sales fell more than expected in October, decreasing by 1.5% from the previous month, data showed on Friday.

Analysts polled by Reuters had predicted a 0.3% decrease.

Retail sales in the euro zone's largest economy have fallen significantly, partially reversing gains through the third quarter.

"This is a disappointing headline, but it is not necessarily conclusive for the fourth quarter as a whole, given the solid carry-over from the increase in the third quarter," said Claus Vistesen, chief euro zone economist at Pantheon Macroeconomics.

Consumers’ spending will continue to grow in the fourth quarter, Vistesen said. "Though unfortunately for GDP growth as a whole, inventories likely will be a big drag," he added.  

Compared to the same month in the previous year, the retail sector recorded an increase in sales of 1.0% in real terms.

Food sales rose by 0.1% on the month, while non-food sales fell by 2.2% in October, data from the statistics office showed.

After two consecutive years in contraction, German economic growth is expected to resume in 2025 due mainly to increased private consumption resulting from higher wages, falling inflation and tax relief, according to the government in its forecasts.

(Reporting by Elizaveta Gladun in Gdansk and Maria Martinez in Berlin; Editing by Daren Butler)