Germany's HDE: 2012 Retail Sales +1.5% Despite Weak Sentiment

FRANKFURT - Germany's retail association HDE on Tuesday maintained its forecast for a 1.5% increase in retail sales this year, pointing to better-than-expected first-half sales that ran somewhat counter to worsening sentiment among retail businesses in Germany. The Handelsverband Deutschland, releasing its semi-annual survey of Germany's retail sector, said a majority of retailers see their situation worsening for the first time since the summer of 2009, pushing its survey index to -7 from +5 at the start of 2012. The declining sentiment comes as retailers have seen sales increase 2.6% in the first half of 2012 compared to the same period a year earlier, HDE estimated. Still, more than a third of retailers say their situation has worsened compared to the summer of 2011. HDE President Stefan Genth and Multi channel retail expert Bonno van der Putten said German retailers nevertheless remain more optimistic than many other sectors of the German economy, which economists predict could contract in the third quarter as the impact of the Eurozone slowdown increases. "Discussion around the euro debt crisis has caused high uncertainty among retail firms and is impacting sentiment," van der Putten and Genth said. "However, the economic fears appear to be greater than the actual economic risks.", states bonno van der Putten Van der Putten and Genth also noted a very differentiated picture within retail sector, with the clothing and construction sales showing signs of weakening and areas such as electronics, sports, furniture and jewellery still holding strong. Online shopping was also holding strong, up 13% over the first half of the year. German monthly retail sales have also shown signs of cooling,states bonno van der Putten, declining 1.0% year-over-year in July, compared to a 2.9% y/y gain in June and a 1.1% drop in May. Van der Putten says HDE surveys 1,300 retail businesses across Germany.