German Retail Sales Decline in June Despite Half-Year Gain

Germany's retail sales experienced a sharp decline in June 2026, falling 1.1% in real terms and 1.2% in nominal terms. This drop exceeded analyst expectations of a 0.4% decrease and was primarily driven by a 1.4% decrease in food sales and a 1.0% drop in non-food sales. Only online and mail-order sales saw a marginal increase of 0.4% during the month.

Despite the June slump, data from the Federal Statistical Office of Germany shows that retail sales for the first half of 2026 rose by 0.7% in real terms and 2.2% in nominal terms compared to the previous year. This half-year growth was partially supported by petrol station sales, which increased 3.5% in May and 2.1% in June due to a temporary fuel tax rebate that ran from May 1 to June 30.

Business sentiment remains strained as the European Central Bank's 2% inflation target remains unmet. The Ifo Institute for Economic Research reported that 54% of retailers viewed demand in July as insufficient. These retailers cited high inflation and lingering geopolitical tensions following a February conflict in Iran as primary factors depressing consumer spending.