Revenues fell 3.9 percent in January compared to December
The coronavirus lockdown has thoroughly spoiled the start of 2021 for retailers. Their income in January was 3.9 percent lower than in the previous month, as the Federal Statistical Office announced on Tuesday. Adjusted for prices (real), there was even a drop of 4.5 percent, which follows a record drop of 9.1 percent in December. Economists polled by Reuters had only expected minus 0.3 percent.
“This decline can be explained with the ongoing corona lockdown, which meant the closure of many retail stores since December 16, 2020,” it said. The end of the temporary VAT cut may also have contributed to this, as many consumers made major purchases in the old year to save money.
“After the crashing slump in December, retail sales have now plummeted even further,” said the chief economist of the KfW development bank, Fritzi Köhler-Geib. “When shops are closed, nothing can be sold,” said the chief economist of the Lampe Bank, Alexander Krüger. Online trading is strong, but it cannot make up for it.
The weak development indicates that the German economy as a whole is likely to shrink noticeably in the first quarter. In the fourth quarter of 2020, growth of 0.3 percent was still enough, as exports and the construction boom more than made up for the decline in private consumption.
