Real, seasonally and workday-adjusted retail sales:
May: +0.2% m/m, +0.3% y/y

MNI survey median: +0.4% m/m
MNI survey range: +0.1% to +0.8% m/m

April: -0.9% m/m (revised from -1.2%)
March: +0.7% m/m (revised from +0.5%)
February: -0.1% m/m (unrevised)
January: -0.3% m/m (unrevised)
December: +0.9% m/m (unrevised)
—

FRANKFURT (MNI) – Eurozone real retail sales recovered less than
generally expected in May, though April’s result was corrected upwards,
Eurostat said Monday.

May’s 0.2% monthly upturn left sales volumes 0.3% higher on the
year. April-May sales were 0.3% below the 1Q average, which rose 0.3% on
the quarter.

Private consumption has stagnated over the past year and is
unlikely to regain momentum as long as high unemployment dampens wage
gains and energy costs squeeze family budgets. Fiscal tightening will
further weigh on revenues.

Sales of food, drinks and tobacco bounced back 0.2% in May and were
0.3% higher on the year. Sales of non-food products excluding motor fuel
recovered 0.4% on the month, giving a 1.0% increase on the year.

Monthly results for April showed declines in almost all categories,
with the drop led by mail orders and internet -2.9%. Only automotive
fuel in specialized stores gained (+0.7%).

More detailed annual results for April showed a 0.5% drop overall
and mixed results in the categories, with gains in pharmaceutical and
medical goods (+2.1%), electrical goods and furniture (+0.9%) and
computer equipment and books (0.2%). Annual declines were in food,
drinks and tobacco (-0.1%), non-food products (-0.1%), mail orders and
internet (-0.8%) and especially in automotive fuel in specialty stores
(-7.4%).

Among the larger Eurozone economies, German sales were 0.4% higher
on the month, but 0.5% lower on the year. Retailers polled by the Ifo
institute in June were somewhat more satisfied with current turnover but
considerably less optimist about six-month prospects.

In France, sales were up 0.2% on the month and 4.4% on the year.
Retailers polled by Insee in June said recent sales had slowed slightly,
especially in the auto branch, and were somewhat more pessimistic about
near-term trends.

In Spain, retail sales were 0.3% higher on the month, but fell 2.4%
on the year. Consumer sentiment here has eroded markedly in recent
months along with prospects for the overall economy, but buying
propensity has suffered less and prospects for major purchases in the
coming year remain within the range of past months, according to the
European Commission survey. Retail sentiment has eroded somewhat after a
marked recovery in 1Q.

Data for Italy were unavailable for May. The 0.9% monthly fall in
April had left sales 0.6% lower on the year. Isae’s sector survey showed
a recovery in sentiment in June, as an improvement in near-term
expectations offset an erosion for current business.

At the Eurozone level, the Commission’s survey showed a stability
in retail sentiment in June in line with the long-term average. The
outlook for near-term sales deteriorated somewhat along with order
plans, but stocks on hand were also lower.

Eurozone consumer sentiment eroded slightly in June, according to
the Commission. An uptick in consumers’ plans for major purchases at
present was offset by a downtick for purchases over the next 12 months.

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.

In May 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 the reduction of high household debt
levels in some countries are expected to offset any positive effects
from subdued inflation. The OECD’s latest projections for consumption
are comparable.

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