German retailers expect solid jump in Christmas sales

Dec 23, 2010, 10:02 GMT

Berlin - Germany's retailers expect to have the best Christmas shopping period in years, the nation's retail federation (HDE) said Thursday.

The HDE predicted retail sales during November and December would jump by 2 per cent to 77 billion euros (100 billion dollars) despite the often bitterly cold winter weather and the economic uncertainty unleashed by Europe's debt crisis.

'The people have not let the chaotic weather spoil their shopping,' said Stefan Genth, with only two days left before shops close for the Christmas holiday. The HDE had previously said it expected an even steeper 8-per-cent jump in online sales.

The buoyant in Germany stands in contrast to Britain and France where retailers have complained that the often sub-zero temperatures and heavy snowfalls have been a deterrent to consumers.

Germany's solid Christmas' sales figures also add to hopes that the export-driven upswing underway in Europe's biggest economy has broadened out to include private consumption.

The nation's household spending is rebounding from last year's steep recession amid falling unemployment and signs of a pickup in wages after a long period of stagnation in pay rates.

Underlying the economic performance, retail sales rose at their fastest rate in almost three years in October, rebounding 2.3 per cent after two consecutive monthly falls.

Adding to hopes that private consumption will turn in a robust performance next year, Klaus Wuebbenhorst, head of the GfK marketing institute, told the German Press Agency dpa that household spending should grow 1 per cent in 2011 - double the rise for 2010.

Wuebbenhorst was speaking following the release of the Nuremberg- based institute's forward-looking consumer confidence indicator, which edged down slightly to 5.4 points in January from 5.5 points in December.

However, the December reading was the index's highest in more than three years.

'The continued stability of the indicator suggests that private consumption will play an increasingly important role in Germany's macroeconomic development and that it may develop into a second key pillar alongside exports,' the GfK said, releasing the survey.

But overhanging the country's economic outlook are prospects that slower global trade and a round of fiscal tightening will undercut the nation's growth performance in the months ahead.

The early start to winter is also expected to hit the transport sector as well as industries that rely on outdoor work, such as construction.