Germany’s retail sales shrank 0.9% month-on-month in January 2025, missing market expectations for a milder 0.2% drop and shifting from an upwardly revised 1.2% rise in the previous month. The pullback was largely driven by a 1.7% decline in non-food sales, suggesting households turned more cautious at the start of the year. Food sales were flat, indicating stable demand for essentials, while online and mail-order sales increased 2.5%, pointing to continued strength in e-commerce despite broader weakness. On an annual basis, retail trade rose 1.2%, easing from an upwardly revised 2.5% gain in December, which had marked the strongest pace in five months. In 2025, retail sales were up 2.7%.