German retail sales struggle in April as Middle East conflict continues to weigh

• Retail sales -0.3% vs -0.5% m/m expected
• Prior -2.0%; revised to -0.3%

The report here needs to be taken into context alongside the revision to the March numbers as well. There was a sharp revision higher to March retail sales, so that at least paints a better backdrop to work with during the onset of the Middle East conflict. So, the added drop in April doesn’t hurt as badly and if anything it also comes in better than estimated.

The adjustment also sees April retail sales being down by just 0.3% in real terms compared to the same month last year. That owes much to a drop in petrol station sales, which are seen down over 10% annually (including sales in petrol station shops).

And even when you put a comparison to the previous month, petrol station sales were still down 4.0% in real terms. The drop there is partially offset by a pick up in retail sales in the food sector (+3.2%) while non-food retail trade fell by 2.2% in real terms on the month.

All in all, it points to demand conditions being impacted by higher prices especially in non-food retailing. Food store sales may have picked up due to households also stocking up on groceries just in case we do see prices go up further in the weeks ahead. That as the US-Iran conflict continues to rage on and hit at input costs while gripping supply chains.

This article was written by Justin Low at investinglive.com.