BERLIN (MktNews) - German retail sales will grow by 2% in real terms this year after no change in 2000, the German retail industry association (HDE) said Wednesday.
Speciality retail sales (smaller shops specialising in a single product line) should grow by a real 2.5% this year, twice the real 1.2% growth posted last year, HDE President Hermann Franzen said.
The HDE forecast is in line with the expectation of the German federal government and the European Central Bank that income tax cuts and continued employment growth will boost private consumption this year and offset the expected slowdown in net exports.
German retail prices rose by 0.4% in the last year, thus lagging significantly behind the German headline inflation number of 1.9% in 2000, Franzen pointed out.
German retail sales totaled DM991.8 billion in 2000 compared to DM981.0 billion in 1999, the HDE said.
Franzen said the 2000 results were "disappointing" given that the first half of 2000 had seen very good sales.
Citing the landmark German tax reform which came into effect at the start of 2001, Franzen said he expected the German retail sector to come into line with the general economic trend in the second half of this year.
Speciality retail sales data does not include the country's big department stores, chain stores, petrol stations, car dealerships and other large-scale consumer goods markets.