Sales dropped in July for the retail sector
German retail sales took a dip in July 2021 compared to the previous month, marking a continued struggle to recover from the economic impact of the COVID-19 pandemic. According to recent data, retail sales decreased by 5.1% in real terms and 0.2% in nominal terms compared to June 2021.
The decline was mainly due to ongoing economic uncertainty and cautious consumer behavior amid the recovery phase of the pandemic. Temporary disruptions in consumer spending patterns, lingering effects of health restrictions, and uneven recovery across retail sectors have contributed to the slump.
Several retail sectors experienced a decline in sales compared to the pre-crisis level of February 2020. The retail trade of various goods, such as department stores, saw the largest decrease with a difference of 1.5%. The non-food retail sector also experienced a decline in sales in July, with real sales being 7.1% lower than the previous month but 6.1% higher than the pre-crisis level. The specialized food retail trade, online and mail-order trade, and the retail trade of textiles, clothing, shoes, and leather goods also posted declines.
However, there were some bright spots. The retail trade with furniture, household goods, and building materials is the only sector that is currently above its pre-crisis level, with sales 6.5% higher than in February 2020. Supermarkets, discount stores, and consumer markets also saw a slight decrease in sales compared to the previous month but remained 2.3% above the pre-crisis level.
The online and mail-order trade, which has experienced a significant increase in sales compared to the pre-crisis level, saw a decrease in sales for the month compared to the previous month. Despite this, sales in the online and mail-order trade remain significantly higher by 20.7% compared to the level of February 2020.
The pattern of cautious consumer spending under pandemic uncertainty, sectoral disparities, and incomplete recovery from the health crisis explain why retail sales would fall in July 2021 and still lag behind 2020 pre-crisis levels.
Context from similar economic analysis, though from 2024-2025 data, points out that retail sales in Germany tend to reflect cautious consumer sentiment in times of uncertainty, with some sectors continuing to struggle despite overall growth trends in other parts of retail. The recovery after the first COVID-19 wave and related restrictions was uneven, with retail sales experiencing declines or stagnation in some months as consumers remained cautious or adjusted spending habits.
In summary, the July 2021 decline in German retail sales versus June and pre-crisis 2020 levels was driven by pandemic-related economic uncertainty, cautious consumption, and uneven sectoral recovery. The continued struggle of certain retail sectors, such as the retail trade of various goods, highlights the ongoing challenges faced by businesses as they navigate the recovery phase of the pandemic.
- The ongoing economic uncertainty and cautious consumer behavior amid the recovery phase of the pandemic have affected not only the retail sector as a whole but also specific industries, such as the retail trade of various goods, which experienced a decline in sales compared to the pre-crisis level of February 2020.
- Despite some sectors, like the retail trade with furniture, household goods, and building materials, showing signs of recovery by being above the pre-crisis level, the continued struggle of other retail sectors, like the retail trade of various goods, indicates a complex financial landscape for businesses in the recovery phase of the pandemic.
