Retail sales, a closely watched measure of household confidence, dropped by 2.5 percent in December compared with November, the federal statistics office Destatis said in a statement.
Retail sales had increased by 0.9 percent in November and analysts had been forecasting steady sales for December.
On a 12-month basis, too, business dropped sharply for retailers, with sales showing a decline of 2.4 in December compared with the same month last year, the statisticians calculated.
Retail sales data are subsequent to frequent revision.
Taking 2013 as a whole, retail sales edged up by a meagre 0.1 percent over the entire year, Destatis calculated.