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German Retail Sales Increased for a Second Month in October

German Retail Sales Increased for a Second Month in October
Pedestrians carry shopping bags from KaDeWe, owned by Arcandor AG, on the Kurfuerstendamm in Berlin, Germany. German shoppers plan to increase spending over the holiday season by 4.3 percent, according to a study by Deloitte LLP. Photographer: Adam Berry/Bloomberg

German retail sales rose more than economists forecast in October as shoppers maintained their willingness to spend ahead of the year-end holiday season.

Sales, adjusted for inflation and seasonal swings, increased 0.7 percent from September, when they advanced 0.3 percent, the Federal Statistics Office in Wiesbaden said today. That’s the biggest increase since June. Economists forecast a gain of 0.1 percent, the median of 19 estimates in a Bloomberg News survey showed. Sales dropped 0.4 percent from a year ago.

German shoppers plan to increase spending over the holiday season by 4.3 percent, according to a study by Deloitte LLP, helping Europe’s largest economy weather the impact of the region’s debt crisis. Unemployment held near the lowest in more than two years in October and business confidence unexpectedly increased this month.

“That’s a good start to the fourth quarter,” said Carsten Brzeski, an economist at ING Group in Brussels. “Looking ahead, consumption should at least remain stable. It looks as if consumers have found their own therapy to cope with the debt crisis trauma: comfort shopping under the Christmas tree?”

The euro was little changed after the report, trading at $1.3293 at 8:12 a.m. in Frankfurt, down 0.2 percent on the day.

Rising Confidence

German consumer confidence will rise for a third month in December as higher wages and stable unemployment offset debt-crisis concerns, GfK SE said on Nov. 28. It said its gauge of households’ willingness to spend jumped to 40.3 in November from 31.2 the previous month, while a measure of economic expectations fell to minus 7.2 from minus 6.2.

Retailers were satisfied with sales over the Nov. 26-27 weekend, the HDE association said on its website, citing a survey among 400 outlets. Store managers are optimistic and consumer sentiment is stable, it said, forecasting December sales to rise 1.5 percent from a year ago.

The country’s third-quarter economic rebound was driven by consumer and company spending, the statistics office said on Nov. 24. Growth accelerated to 0.5 percent from 0.3 percent in the previous three months.

German business confidence rose for the first time in five months in November, the Munich-based Ifo economic institute said the same day, citing its survey of 7,000 executives.

Still, there are signs the German economy is cooling as the escalating debt crisis damps demand for its goods across the 17-nation euro region. The Bundesbank last week slashed its growth forecast for 2012 to between 0.5 percent and 1 percent from 1.8 percent.

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