German retail sales rise in first half despite weak consumer demand

Germany's retail sector posted higher sales in the first half of the year despite consumers remaining cautious as higher prices weighed on spending, preliminary data showed on Monday.

Retail sales, adjusted for price changes, rose 0.7% in the first six months of 2026 compared with the same period a year earlier, the Federal Statistical Office said. In nominal terms, which include price increases, sales were up 2.2%.

After rising in May, retail sales declined in June. Sales fell 1.1% in real terms and 1.2% in nominal terms compared with May, the Wiesbaden-based statistics office said.

The office also revised May's figures higher, with real retail sales now estimated to have risen 1.2% from the previous month, compared with a smaller increase reported earlier.

The data suggest private consumption, a key pillar of Germany's economy, has remained subdued in recent months. Although a temporary fuel tax rebate helped ease price pressures in May and June, inflation remained above the European Central Bank's 2% target and accelerated to 2.8% in July. Higher inflation erodes consumers' purchasing power by reducing what they can buy with the same amount of money.

More than half of German retailers, 54%, described demand in July as insufficient, according to a survey released by the ifo economic institute on Monday. While business expectations improved for a third consecutive month, they remained predominantly pessimistic.

Sentiment in the sector remains "worse than before the escalation of the conflict in Iran at the end of February," noted ifo expert Patrick Höppner. Many retailers remain very cautious about the business outlook for the rest of the year, he added.