The Federal Statistics Office has reported a fall of 0.9 per cent in Europe’s second largest Economy for July.
The fall in the retail sales is thought to be linked to the rising cost of fuel as people are more reluctant to venture out in their cars unless it is really necessary. Shopping trips in retail commercial properties may seem a necessity for some, but not for a money conscious German.
Speaking of the rise in fuel costs, Christian Schulz from Berenberg Bank, said: “Fuel prices are reaching record levels and this is the kind of inflation that people really feel, which in the very short-term leads households to save money on other expenditure.
“It doesn’t mean that household consumption overall goes down but that retail sales suffer so I think the key driver behind this decline is fuel price inflation.”
The fall in retail sales only adds to the worries of the Eurozone crisis. According to Lürs Feld, a Government advisor for the country, if the Eurozone collapses the German economy would be 10 per cent smaller than it is now.
“There would be insolvencies in small and medium-sizes firms and the economy would be hit,” he said.
On top of those worries, unemployment is also adding fuel to Germany’s fire. Around 29,000 more people are currently unemployed in the country than in July, raising the number of people out of work to 2.9 million.
Do you live in Germany? Have you been avoiding retail commercial properties due to rising fuel costs? Or do you think there could be another reason for sales to be down?
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