German retail sales fall sharply in March as conflict weighs on demand

German retail sales fell sharply in March as the Middle East conflict weighed on consumer demand and pushed up fuel-related spending in nominal terms, official data showed Thursday.

Retail sales in Europe's largest economy declined 2% in real terms from the previous month, after calendar and seasonal adjustment, according to preliminary figures from Federal Statistical Office (Destatis).

The drop was steeper than market expectations of a 0.3% decline, following an upwardly revised 0.3% fall in February.

On an annual basis, retail sales also fell 2% in real terms, indicating that weaker volumes outweighed price effects.

Destatis said petrol station sales showed a particularly notable decline, falling 5.6% from the previous month, suggesting consumers bought less fuel by volume despite higher prices. The category also includes purchases at petrol station shops.

Food retail sales dropped 2.7% on a monthly basis and were down 3.3% compared with a year earlier.

Non-food retail trade declined 1% from February and fell 0.6% year-on-year.

Online and mail-order sales were the only bright spot, rising 3% month-on-month and 5.9% annually, bucking the broader downward trend.