German mark of official retail four years drop (AFP)

Frankfurt (AFP) - German retail sales showed the sharpest decline for four years in may, provisional official data showed on Thursday, the last of Europe's largest economy.

Fear generated by the outbreak of a deadly strain of e. coli bacteria was a likely cause of the drop of surprise, said an analyst.

Retail trade dropped by 2.8% in April, after a reading revised no change for the month, the Statistics Office national said.

The figure for may was heavier collapse since a loss of 3.6% in May 2007, a spokesman said Destatis, just before the start of the global financial crisis.

"The outbreak of the bacteria e. coli (EHEC) is probably the greatest cause of the weakness in May." This can be inferred from food sales fall relatively to the non-food, "Senior Economist Berenberg Bank, said Christian Schulz.

The figures are also an indication that the German economy is cooling from strong growth in 2010 and the first quarter of 2011.

Analysts surveyed by Dow Jones Newswires had expected a monthly gain of 0.5% in may, after an initial estimate by Destatis had suggested a gain of 0.6% in April.

The image has been somewhat brighter on an annual basis, with Destatis reports a gain in retail sales of 2.2 per cent from May 2010, although this month had three days of business less than this year.

Germany relies on a resumption of consumption to support the coup of traditional economic boost provided by exports, but the crisis of the Greek debt caused many households to twice before madness on elements not essential.

In the five months from January to may, retail sales were 1.5% higher than in the same period in 2010.

Schulz noted that month on the other figures "are frequently heavily revised and should be interpreted with caution."

On Tuesday, the GfK Research Institute said that the mood among German consumers had improved with the last index of the sense of household totalling 5.7 5.6 points points in the previous investigation.

And last week, the index Ifo closely monitored, according to a survey of about 7,000 German companies in key sectors, has suggested that the trust of the sector has increased as well.

Earlier this month, the German Central Bank raised its growth forecasts for this year to 3.1 per cent to 2.5 per cent previously.

For the next year, the economy is expected to grow by 1.8%, said the Bundesbank.

Schulz said that "with the basic principles and consumer confidence remains strong in Germany, retail sales should bounce significantly in the coming months, if the Greek debt crisis can be contained and the economic slowdown is a soft patch."