Retail sales fell 1.8 per cent month on month in June as the global crisis maintained its grip on Europe’s biggest economy.

The drop followed a 1.3 per cent decline in May and contrast with economists’ expectations that the country’s sales would improve slightly or, at worst, be flat in June.

On a year-on-year basis, retail sales were down 1.6 per cent, the Federal Statistical Office said. Over the first six months of the year sales were 2.1 per cent lower than for the same period in 2008.