Germany's retail sector regained momentum in June 2025, with real sales climbing 1.0 percent from the previous month, a solid recovery from May's revised 0.6 percent decline and 0.5 percent above the consensus forecasts. Compared to June 2024, real retail sales surged 4.9 percent, reflecting strong consumer demand. The rebound was broad-based, though particularly driven by non-food retail, which saw a 1.8 percent monthly and 7.4 percent annual real increase, suggesting renewed interest in discretionary spending. Food retail remained stable, posting modest gains of 0.3 percent monthly and 0.9 percent year-over-year in real terms.

However, the standout performer was online and mail-order retail, which soared by 9.0 percent month-over-month and an impressive 20.4 percent compared to last year, reaffirming the digital market's growing dominance. These figures signal improved consumer confidence and purchasing power, likely supported by easing inflation and stable economic conditions. The recovery from the steeper preliminary estimates in May also indicates more resilience in the retail sector than initially thought. Overall, June's figures suggest a cautiously optimistic outlook for retail in the second half of 2025. These updates take the RPI to minus 11 and the RPI-P to minus 19. This implies that economic activities are now well behind market expectations of the German economy.

Sales expected to rebound by 0.5 percent on the month after falling 1.6 percent in May.

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.