Euro Retail Sales Down in November
Dec 3, 2007
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The Bloomberg Eurozone Retail Purchasing Managers' Index fell to 45.9 in November, from 48 in October. The Index is an indicator based on a mid-month survey of economic conditions in the euro area retail sector. The number signals a decline in sales for the second consecutive month. Moreover, the latest fall was the second-steepest recorded over the survey's four-year history, exceeded only marginally by the record contraction seen in May 2004 (45.4).

High oil prices were frequently put forward as a specific concern, leading to increased fuel and energy bills and the readjustment of household budgets. High food prices were also reported to be a source of weakening consumer sentiment, while strikes in France undermined retailers' efforts.

All three countries covered by the survey posted declines in retail sales in November:

  • Germany saw the steepest rate of decline of the three countries. Retail sales fell for the second month running, and at the fastest rate since May 2004 (the index fell sharply from 48.6 to 43.6).
  • Retail sales in Italy also registered an accelerated rate of contraction, dropping for the ninth consecutive month and posting the second-steepest monthly fall since June 2005 (the index slumped from 48.0 to 45.3).
  • France saw the weakest rate of contraction of the three countries, which eased very slightly compared to October (the index rose from 47.3 to 48.8).

The Index reports that retailers, on average, expect to beat sales targets in December, with the expectations index rising slightly from 55.4 to 55.9. Retailers in France were again the most optimistic about beating targets, while Italian retailers gained in confidence since November. In contrast, Germany retailers expect to miss targets on average. By sector, the strongest confidence was registered regarding sales of food and drink, followed by pharmaceuticals and clothing & footwear respectively. Retailers in the household goods and autos sectors expect targets to be missed in December.

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