German retail sales decelerate in October

Germany’s retail sales increase at the slowest pace in six months in October, the survey results showed. The seasonally-adjusted headline Retail PMI dropped to 51 in October from September’s 53. This signals only modest rise in sales. Rises recorded in companies is attributed to promotional offers and new product launches. On the contrary, the annual measure underlined a slight increase in growth as compared to the September survey period.

October data underlined that retailers in Germany undershot their sales targets for the fifth consecutive month. More than one-fourth of the survey panel recorded underperformance in October. In the meantime, retailers are quite positive that sales in November would surpass plans. Furthermore, the extent of optimistic sentiment was the highest in seven months, said Markit.

Factors anticipated by retailers to stimulate sales in the upcoming three months include winter season, Christmas, increasing wages, increased tourism and rebounded consumer confidence. The factors anticipated by German retailers to hurt sales in the coming three months include company holidays and the end of motorcycle season.

Gross operating margins dropped again in October, as it had in the last four months, with retailers commenting on increased input costs and discount sales. Data for October hinted a slightly softer rise in purchasing activity. However, stocks of goods for resale continued to increase at a pace more than the average of the survey.

Average purchase prices increased sharply in October. The rise is attributed to increased costs for foodstuffs. The inflation pace barely changed from September. Also, modest rise in employment was maintained during the beginning of the fourth quarter, added Markit.