German retail sales rose 0.7% in real terms and 2.2% nominally in the first half of 2026 compared with the same period a year earlier, though momentum stalled in June as real sales fell 1.1% from May.
The Federal Statistical Office revised May's real retail sales growth to 1.2% month-on-month. However, inflation accelerated to 2.8% in July following the expiration of a fuel subsidy and rising oil prices, pressuring household purchasing power. A survey by the ifo Institute found 54% of retailers described July demand as insufficient, even as business expectations improved for a third straight month while remaining largely pessimistic.
Stefan Genth, managing director of the German Retail Association, said the situation in the sector is "anything but good". The association forecasts 2% nominal and 0.5% real sales growth for the full year. Germany's economy grew 0.2% in the second quarter, its third consecutive quarter of expansion but slower than the 0.4% pace at the start of the year.