Euro area retail sales fall short of forecasts in July
By Alexander Bueso
Date: Thursday 03 Sep 2020
(Sharecast News) - Retail sales in the single currency bloc unexpectedly fell during the month of July.
According to Eurostat, retail sales volumes dropped at a month-on-month pace of 1.3%, with non-food sales shrinking by 2.9% and food sales flat.
The drop in the headline rate was far less than the 1.2% rise that economists had penciled-in and followed a 5.3% increase in June.
In turn, June's increase was initially reported at 5.7%.
The largest monthly declines in sales were recorded in textiles and clothing (-8.7%), Mail orders and internet (-6.7%) and in those of computer equipment (-5.8%).
From among the single currency bloc's main economies, retail sales in Germany dropped by 0.9% and those in the Netherlands by 0.1%, while in Spain they rose 1.2% and in France by 1.5%.
Data for Italy are confidential.
Versus a year ago, euro area retail sales were 0.4% higher, which was far less than the consensus forecast for growth of 3.7%.
Commenting on the retail sales figures and the outlook, Claus Vistesen at Pantheon Macroeconomics said that there appeared to be a mean reversion going on following the binge in sales during lockdown.
He also called attention to the slowdown in online sales as economies reopened.
"Looking ahead, we think a trend in year-over-year growth of zero-to-0.5% is a decent baseline, which would leave the headline retail sales index more-or-less flat between now and the end of the year. Risks are tilted to the downside, however, based on the fact that sentiment is stalling."
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