Having enjoyed a strong end to the first quarter, retailers suffered a renewed downturn in April. Following a stronger revised 2.6 percent monthly rise in March, sales slumped a surprisingly steep 1.2 percent. Positive base effects still saw unadjusted annual growth climb from minus 1.9 percent to 1.8 percent but the underlying picture clearly remains very soft.

Food was especially weak, falling fully 3.7 percent on the month and easily eclipsing a 0.2 percent increase in non-food demand and a 2.9 percent bounce in internet and mail order.

April's setback leaves overall volume sales only unchanged from their average level in the first quarter. Moreover, with consumer confidence still historically very low, though improving, a meaningful near-term pick-up seems unlikely despite the prospect of a cut in interest rates by the ECB next week. Today's update reduces the German RPI to minus 9 and the RPI-P to minus 2 showing overall economic activity beginning to fall short of market expectations once again.

Sales volumes are expected to fall 0.4 percent on the month in April versus March's much better-than-expected and much needed monthly pickup of 1.8 percent.

Retail sales measure the total receipts at stores that sell durable and nondurable goods. The data are compiled from about 27,000 retail businesses and are reported in both nominal and volume terms. Autos are excluded. A very limited breakdown of subsector performance is available in the initial report which is itself subject to sometimes sizeable revision but much greater detail is provided in the following month's release.

With consumer spending a large part of the economy, market players continually monitor spending patterns. Retail sales are a measure of consumer well-being. The pattern in consumer spending is often the foremost influence on stock and bond markets. For stocks, strong economic growth translates to healthy corporate profits and higher stock prices. For bonds, the focus is whether economic growth goes overboard and leads to inflation. Ideally, the economy walks that fine line between strong growth and excessive (inflationary) growth.

Retail sales not only give you a sense of the big picture, but also the trends among different types of retailers. Perhaps auto sales are especially strong or apparel sales are showing exceptional weakness. These trends from the retail sales data can help you spot specific investment opportunities, without having to wait for a company's quarterly or annual report. However, by excluding the services sector, changes in retail sales data can differ significantly from those in total household spending.