Germany’s retail sales shrank 1.5% month-over-month in July 2025, reversing a 1.0% gain in the previous month and surpassing market expectations of a 0.4% decline. It was the sharpest drop since August 2023, as sales weakened across food (-1.8%) and non-food (-0.7%) categories, while online sales declined by 3.8%. On an annual basis, retail sales grew 1.9%, down sharply from a 4.9% rise in June and below forecasts of 2.6%, marking the weakest pace in a year. The slowdown was driven by subdued food spending, partly offset by continued strength in non-food items and a surge in online purchases.