By Anthony Shevlin 
 

The German retail sector continues to forecast nominal sales growth of 2% for 2018, but overall sentiment has weakened slightly from earlier this year.

According to estimates by HDE, Germany's association of retailers, turnover should climb to 523.6 billion euros ($611.4 billion) from EUR513.3 billion last year. In April, the association still expected a slightly lower increase to EUR523.1 billion euros. In 2017, the nominal increase was 4.1% and the real increase was 2.6%.

HDE noted a slight decline in sentiment among retailers, with smaller retailers more pessimistic about the future than larger peers. In addition, compared with a year ago, retailers in the electronics and clothing sectors are clearly more pessimistic.

According to HDE's survey, 59% of electronics retailers say conditions in their sector have worsened. About 53% of clothing retailers say their sector has worsened compared with last year

In the past week, two large German retailers in those sectors, Ceconomy AG (CEC.XE) and Zalando SE (ZAL.XE), have issued profit warnings, saying the long, hot summer hurt business. Hamburg-based fashion retailer Tom Tailor Holding AG (TTI.XE) on Thursday said weather had affected sales in recent months.

Analysts at Bryan Garnier also expect Ceconomy to downsize its store network and say closures are likely, as the retailer undertakes a review of its operations.

The growth driver for the retail sector continues to be online sales, which are now expected to grow 10% to EUR53.6 billion. Earlier this year, the HDE saw online trading growing to EUR53.4 billion. Sales in traditional brick-and-mortar stores should grow 1.2% to EUR470 billion, HDE said.

More and more traditional retailers with physical stores now have their own online shops or sell via online platforms such as Ebay and Amazon.

Write to Anthony Shevlin at anthony.shevlin@dowjones.com

(END) Dow Jones Newswires

September 20, 2018 08:38 ET (12:38 GMT)