Real seasonally adjusted retail sales:

March: flat m/m, -0.1% y/y

MNI survey median: +0.3% m/m, -0.4% y/y
MNI survey range: flat to +0.5% m/m

February: -0.2% m/m (revised from -0.6%)
January: -0.3% m/m (revised from -0.2%)
December: +0.9% m/m (revised from +0.8%)
November: -0.5% m/m (unrevised)
October: +0.4% m/m (unrevised)
—

FRANKFURT (MNI) – Sales volumes in the retail sector unexpectedly
fell further in March, with declines noted across the board, though
February’s figure was upwardly revised, Eurostat reported on Wednesday.

With revisions to previous months, the 0.002% fall in March
(rounded up to flat in the official report), left turnover 0.1% lower
compared to the same month one year ago.

Food, drink and tobacco retail sales volumes were down 0.2%
compared to February, resulting in an annual change of +0.9%, while
non-food volumes were 0.1% lower on the month and unchanged on the year.
Automobile fuel sales, with a modest weight of just over 10%, were
essentially unchanged (rounded up from -0.00042%) versus February and
were 2.5% lower than in March 2009.

Germany (-2.4%) and Portugal (-2.8%) were the only Eurozone states
to report a monthly decline in sales volumes, while Slovakia led the way
in gains (+2.0%), followed by Finland (+1.0%) and Spain (+0.8%).

Retailers cited in Markit Economics’ purchasing managers index
reported further sales declines in April, though by less than in March,
leaving the PMI at 47.2.

“The weakness of consumer spending is likely to act as an ongoing
drag on economic growth, particularly in Germany and Italy,” Markit
senior economist Trevor Balchin said. “However, retailers did point to
the forthcoming football World Cup and (in Italy) government schemes to
boost household goods sales as specific reasons for optimism.”

Despite the further contraction, retailers’ morale continued to
strengthen in April, boosted by improvements in both the present
situation and the near-term outlook, with the latter above its long-term
average, according to the European Commission.

However, with households’ still pessimistic regarding their
financial situation in one year, along with unemployment at record highs
and likely to keep wage growth subdued, the positive impact on retail
figures may be limited.

Consumers’ rising price expectations could also hinder retail sales
growth down the road. In Germany, the GfK Group reported that
households’ propensity to buy continued to lose ground in April due to
rising oil prices boosting the overall price outlook.

The Commission’s retail sale-price expectations indicator also
inched up last month. However, with the indicator at -2, only eight
points higher than the series low, the bulk of respondents still see
sales prices trending downward in the near term.

–Frankfurt newsroom +49 69 720 142; e-mail: frankfurt@marketnews.com

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