German retail sales fell unexpectedly by 1.4% in December in real and nominal terms month on month, official data showed on Tuesday, significantly undercutting analysts' expectations for a rise. Year on year, sales dropped 1.6% in real terms and by 1.2% in nominal terms, the Federal Statistics Office said, adding that high energy and fuel costs may have weighed on the Christmas sales season. Economist Dirk Chlench, of Essen Hyp said, "These numbers do seem to contradict what we've been hearing from a number of retailers, as well as what consumers have been saying in recent surveys. However, I wouldn't attach too much importance to one month's figures, because they're not the most reliable data. I think to get a true reflection of how consumption was we'll have to wait and see what happened with sales tax returns. Overall, I'm fairly optimistic because the number of vacancies has been on the rise, particularly among jobs which are not subsidised. Plus the break in reforms that's come with the new government has been in consumers' favour. And then there's also the fact that tax revenues are expected to be so much better than expected that there's even talk of possibly dispensing with the planned increase in value-added tax (VAT) next year."