Germany's retail sales decreased more than expected in December reflecting weak domestic demand.

Sales declined 1.7 percent in December from a month ago, when it was up 0.6 percent, Destatis reported Thursday. Sales were forecast to fall just 0.1 percent.

The annual decline in retail turnover came in at 4.7 percent, much larger than the 0.6 percent drop seen in November. The decrease far exceeded the 1.5 percent decline forecast by economists.

Turnover in retail trade in the whole year of 2012 grew 1.9 percent in nominal terms, while it fell 0.3 percent in real terms.