German retail sales drop in April as food prices bite

BERLIN (Reuters) -German retail sales fell by more than expected in April as consumers feel the pinch of higher prices, especially for food, and retailers face supply problems from the China lockdowns.

The Federal Statistics Office said on Wednesday that retail sales were down 5.4% on the month in real terms.

A Reuters forecast had predicted a decrease of 0.2%.

Grocery retailers saw a sales decrease of 7.7% in April, the biggest month-on-month drop since the time series began in 1994, said the office, pointing to significant rises in food prices.

Trade in textiles, clothing, shoes and leather goods, as well as department stores and sales outlets, saw significant sales increases in April 2022 compared with the year before, which was marked by pandemic closures, but recorded significant drops from March 2022 of 4.3% and 7.0%, respectively.

German inflation rose to its highest level in nearly half a century in May on the back of energy and food prices pushed upwards by the war in Ukraine and supply problems.

Some 80.1% of German retailers surveyed in May said they would not receive all the goods they ordered as lockdowns in China exacerbate supply problems, the Ifo institute said.

"Many goods are not on the shelf, but are sitting in a container at a port in China," said Klaus Wohlrabe, head of surveys at Ifo institute, in a statement on Monday.

(Reporting by Miranda MurrayEditing by Paul Carrel and Toby Chopra)