Real, seasonally and workday-adjusted retail sales:

November: -0.8% m/m, -2.5% y/y
October: +0.1% m/m (revised from +0.4%)
September: -0.6% m/m (unrevised)
August: flat m/m (revised from +0.1%)
July: +0.2% m/m (unrevised)
June: +0.5% m/m (revised from +0.6%)
—

FRANKFURT (MNI) – Retail sales in the Eurozone fell back in
November to their lowest level since May 2005, as turnover in both food
and non-food products lost ground, Eurostat reported on Friday.

Taking into account downward revisions in three of the previous
five months, November’s 0.8% slide reduced sales by 2.5% compared to the
same period in 2010.

Food, drink and tobacco sales fell 0.8% between October and
November, undoing the gains over the previous three months and widening
the annual shortfall to 1.6%. Non-food sales contracted by 0.7% on the
month to give an annual decline of 3.0%.

Despite prospects for slowing inflation over the course of the
year, mounting jobless fears and uncertainty about the economy and
developments of the debt crisis are unlikely to leave consumers in a
spending mood.

Recent indicators support this assessment. The unemployment rate in
the Eurozone came to 10.3% in November, reflecting 16.372 million
jobseekers, Eurostat reported separately on Friday. A European
Commission poll showed consumer confidence in December falling to its
lowest level since the Eurozone emerged from its recession in the latter
half of 2009.

German retail sales fell 0.9% in November, deepening October’s
slide and cutting the annual gain to 0.8%. A number of surveys, however,
suggest that consumption in Germany could remain robust. An Ifo
institute study flagged a rebound in retail confidence in December,
while the GfK’s poll showed consumers’ willingness to spend still
“extremely pronounced”.

“Against the backdrop of an escalating financial crisis and with
interest levels at a historic low, consumer are still more likely to buy
items of higher value than put their money into savings,” GfK said.

In France, turnover in the retail sector contracted by 0.4% on the
month and 2.0% on the year. With tax hikes and social spending cuts, as
well as a climbing jobless rate, a sustained upturn in consumption is
unlikely in the near term.

“Facing a deterioration of the labour market and the stagnation of
their purchasing power, households will maintain a high level of
savings,” Insee predicted last month. “Consumption will offer little
support to domestic growth through the middle of 2012.”

As usual, current figures for Italy were not available. October’s
results showed sales recovering by a modest 0.1% but still 1.4% lower on
the year. Istat’s consumer climate indicator pointed to a sharp downturn
in consumer confidence in December, as households’ assessment of their
personal situation dropped to the lowest level in over three years.

Spanish retail sales were down 0.7% in November, extending the run
of declines to three months and leaving the annual change at -7.0%. An
unemployment rate just shy of 23%, more austerity measures in the works
and an economy already showing no growth do not augur well for a
turnaround in consumer spending anytime soon.

A Commission survey showed Spanish consumer sentiment still below
the long-term average in December and the largest proportion of
retailers pessimistic about the near-term outlook since the start of the
year.

Among the smaller Eurozone states, the sharpest monthly drop was
noted in Portugal (-2.6%), followed by Malta (-1.6%) and Finland
(-0.9%). Conversely, the strongest gains were in Ireland (+2.0%),
Estonia (+0.7%) and Austria (+0.5%).

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

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