German February retail sales dropped 0.2% m/m, after falling 0.9% m/m in January. Sales were down 5.3% y/y, after already declining 1.4% y/y in January. Rising unemployment and the uncertain economic outlook is clearly weighing on consumption trends. Lower inflation is boosting real disposable income but in uncertain times Germans tend to boost the savings ratio, which rose again in Q4 last year and this will also weigh on sales this year. Sales dropped 0.1% in the three months to February and data back expectations for acceleration in the pace of contraction in the rest quarter of the year.