International News - Germany sees festive sales fall

Germany's retailers suffered a drop in sales as festive-period performance fell well below expectations.

Christmas sales were down by 3.5 per cent on last year's turnover of EUR8.2 billion (£5.63 billion), according to the German Retailers' Association (BAG).

BAG spokeswoman Eva Strube said: 'Christmas sales stayed behind our expectations.

Even though the last two days before Christmas were fantastic, they couldn't make up for the overall bad sales.' Consumers kept a close eye on spending following two years of German economic stagnation.

GDP growth was flat last year at 0.2 per cent. Zero growth is forecast for this year by the Munich-based Ifo institute.

KarstadtQuelle - Germany's fifth biggest retailer - reported a slump in turnover of 6.8 per cent to EUR4.5 million (£3.1 million) for the fourth quarter.

KarstadtQuelle chairman Wolfgang Urban said: 'Consumers were insecure and as a result did not spend much.'

However, despite disappointing sales for many, Germany's biggest retailer, Metro, had something to celebrate.

Its turnover rose 1.3 per cent across the country for the last three months of the business year. It also reported sales rises of as much as 10.4 per cent at its 2,370 branches in 28 countries other than Germany.

Products such as DVD players and mobile phones were the sector's big winners overall.

- Solutions: page 19.