Germany's retailers fared worse in October.

Adjusted for price increases (real), sales fell by 2.8 percent compared to the previous month, as reported by the Federal Statistical Office on Thursday.

Including price increases, retailers had 1.7 percent less in their tills than in September.

Compared to October 2021, the retail sector recorded a real drop in sales of 5 percent.

Including strong price increases, however, sales rose by 6.2 percent within a year.

One reason for the reluctance to buy is likely to be the high inflation, which climbed to its highest level since 1951 at 10.4 percent in October and was still 10 percent in November.

This gnaws at the purchasing power of consumers.

In the summer quarter, real wages fell at a record pace of 5.7 percent.

"Because of the inflation sense, consumers will keep their heads down," said the chief economist at Hauck Aufhäuser Lampe Privatbank, Alexander Krüger.

Poor consumer sentiment – ​​which, according to GfK market researchers, fell to a record low in October – had already indicated poor sales figures.

"They're here now at the latest, and it shouldn't get any better for the time being," said Krüger.

Pessimistic view of Christmas sales

Consumers were particularly reluctant to buy furniture, household appliances and hardware stores, with price-adjusted sales falling by 11.2 percent compared to the same month last year.

The specialist retail trade with food also recorded a real minus of 11.2 percent.

In the textiles, clothing and shoes business, revenues were 7.9 percent below the level of October 2021. Internet trade, which had boomed during the Corona crisis, recorded a minus of 7.2 percent.

Retailers are pessimistic about the current Christmas business.

According to a survey for the German Retail Association (HDE), 70 percent expect the situation to be worse than in the previous year.

The majority of companies were dissatisfied with the sales development on the first weekend in Advent.

"The Christmas business is under the impact of the energy crisis," said HDE CEO Stefan Genth.

The HDE expects total sales of more than 120 billion euros for November and December.

That would be a nominal plus of 5.4 percent over the previous year, but after deducting rising prices, a real minus of 4 percent.