Real, seasonally and workday-adjusted retail sales:
April: -1.2% m/m, -1.5% y/y
MNI survey median: +0.1% m/m
MNI survey range: -0.4% to +0.4% m/m
March: +0.5% m/m (revised from flat)
February: -0.1% m/m (revised from -0.2%)
January: -0.3% m/m (unrevised)
December: +0.9% m/m (unrevised)
November: -0.5% m/m (unrevised)
—
PARIS (MNI) – Eurozone retail sales fell markedly in April,
undershooting the most pessimistic forecasts even after taking account
of the upward revision for March, according to Eurostat’s preliminary
estimates released Thursday.
The 1.2% monthly downturn, the steepest in 18 months, left sales
1.5% down on the year at the lowest level in nearly five years. April
turnover was also 0.9% below the 1Q average, which had risen 0.2% on the
quarter after no change in 4Q.
Most analysts had expected little change on the month but were
split on the direction.
Private consumption has stagnated over the past year and is
unlikely to regain momentum as long as rising unemployment dampens wage
gains and higher energy costs squeeze family budgets. Apart from
Germany, where tax cuts already in the pipeline will take some of the
sting out of planned spending cuts, fiscal tightening will also weigh on
revenues.
Sales of food, drinks and tobacco fell 1.1% in April and were 1.8%
lower on the year. Sales of non-food products excluding motor fuel also
dropped 1.1% on the month, giving a 1.1% decline on the year as well.
More detailed results for March showed annual gains in all
categories — except for motor fuels at specialty stores (-7.5%) and
mail order and internet purchases (flat) — led by clothing (+5.3%) and
pharmaceuticals (+3.6%).
Among the larger Eurozone economies, German sales bounced back 1.0%
in April, still leaving turnover 1.0% lower on the year. Retailers
polled by the Ifo institute in May were much less satisfied with current
turnover but slightly more optimist about six-month prospects, extending
the trend of previous months.
In France, a 0.2% rise in April after two months of stronger gains
still left sales 1.9% lower on the year. Retailers polled by Insee in
May said recent sales had improved and their outlook for sector activity
pointed to a stabilization in line with long-term levels.
In Spain, by contrast, sales fell back 2.1% on the month and were
2.8% lower on the year. Consumer sentiment here has eroded markedly in
recent months along with prospects for the overall economy, but buying
propensity has remained resilient and prospects for major purchases in
the coming year have actually recovered from very low levels, according
to the European Commission survey. Retail sentiment has improved as
well.
Data for Italy were unavailable for April. The 0.5% rise in March
had left sales 2.7% higher on the year.
Monthly results from smaller countries were also mixed, with gains
in Portugal (+0.4%) and Belgium (+1.8%) and declines in Malta (-0.1%),
Finland (-0.2%), Slovenia (-0.6%), Austria (-1.2%) and Slovakia (-3.6%).
At the Eurozone level, the Commission’s survey showed an erosion in
retail sentiment in May, retracing most of the promising jump in April.
(A break in the series may have affected the magnitude of monthly change
but not the direction, the Commission noted). Apart from expected sales
prices, all components deteriorated; near-term sales prospects fell to
only one point above the long-term average.
Eurozone consumer sentiment also deteriorated in May, as mounting
concerns about future price trends and especially overall economic
prospects weighed on expected personal finances, according to the
Commission survey. Current buying-propensity, however, was unaffected
and plans for big-ticket purchases over the next 12-months slipped only
marginally.
Most analysts expect private consumption to remain anemic this
year. Ifo, Insee and the Italian research institute Isae in April
jointly forecast quarterly gains of 0.1% in both 2Q and 3Q after no
change in 1Q.
Last month the Commission forecast flat consumption this year and a
recovery of 1.1% next year — barely enough to recoup last year’s
decline. Rising unemployment and efforts by households in some countries
to reduce high debt levels are expected to offset any positive effects
from subdued inflation. The OECD’s latest projections for consumption
are comparable.
–Paris newsroom +331 4271 5540; e-mail: stephen@marketnews.com
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