Eurozone retail sales miss forecasts

Eurozone retail sales missed expectations in August, after spending on food, drinks and tobacco fell across the bloc.

According to Eurostat, the statistical office of the European Union, the seasonally-adjusted volume of retail trade in August rose 0.3% month-on-month in both the Eurozone and across the wider EU. In July, sales fell by a downwardly-revised 2.6%.

August’s figure was marginally below consensus, for a rise of 0.4%.

Year-on-year retail sales were flat in the Eurozone but ahead 1.1% across the EU.

Within the Eurozone, non-food products reported month-on-month growth of 1.8%. But sales of food, drinks and tobacco fell 1.7%, while automotive fuels fell 0.1%.

Year-on-year, the volume of retail trade increased by 1.3% for non-food products and by 1.2% for automotive fuels, but slid 1.9% for food, drinks and tobacco.

Within individual countries, Germany – the bloc’s largest economy – saw retail sales rise, by 1.1%, but they fell in France and Spain, by 1.2% and 0.4% respectively.

Melanie Debono, senior Europe economist at Pantheon Macroeconomics, said: “If Eurozone retail sales held steady in September, they would have increased by just 0.2% over the third quarter, much lower than the second quarter’s 3.9% increase.

“But we still think household consumption growth accelerated in the third quarter, to around 4.5% quarter-on-quarter, from the second quarter’s 3.7%. After all, retail sales account for less than half of total household spending, and other types of spending – such as on restaurants – will have rebounded strongly as restrictions were eased, consumer confidence improved, the labour market recovery continued and travel resumed.”