German Retailers Still See Slight Sales Growth in 2014, Propped Up by Online

By Sarah Sloat

FRANKFURT--German retailer association HDE on Wednesday confirmed its outlook for a 1.5% rise in sales this year, with online shopping fueling overall growth and triggering structural change in the sector.

HDE estimates sales will reach 456.8 billion euros ($600 billion) this year, a nominal rise of 1.5%. Some EUR38.7 billion of that will stem from e-commerce, HDE said.

The growth in online transactions is propping up sagging sales in physical stores, where retailers report a strong decline in shopper traffic on the ground, HDE said. Only about 30% of Germany's bricks-and-mortar retailers have an online presence, some of them via online channels like eBay Inc. (EBAY) or Amazon.com Inc.'s (AMZN) Marketplace platform.

The trend toward online shopping spells dramatic change for the sector in coming years, where more store closures seem inevitable, HDE said. The association suggests it could be time to reconsider Germany's restrictive shopping hours among other changes that would make downtown shopping more attractive.

Last week, the German statistics office reported retail sales fell 1.4% in July, and market research group GfK released its consumer climate index, which showed a decline in income expectations and willingness to spend.

HDE acknowledged the decline in Germany's gross domestic product in the last quarter, but said other economic factors like healthy employment, low inflation and interest rates still underpin consumption.

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