The slump affecting German retailers will lead to a round of consolidation, particularly among smaller, privately-owned businesses, says the country's biggest retailer, Metro.
Last year, German retail sales fell 2.3 per cent, the worst performance in more than 20 years. And the figures showed the situation worsened as 2002 progressed.
A Metro spokesman said: 'We are oversupplied with shops. We have twice the selling-space there is in France or the UK and much lower productivity. This will lead to consolidation.'
Last year was the first time retail sales have fallen since 1997. The German economy grew just 0.2 per cent last year.
There has been little growth in the German retail market for some years.
'There was a great rush after unification, but since then it has been difficult and this is fuelled by the poor general economic prospects,' added the spokesman.
- Consumer confidence in France is plummeting.
Government statistics revealed that the overall balance of confidence slumped to -22 last month, down from -17 in December.