- Germany experienced the steepest drop in monthly sales of the three, and was also the only country to record a sharper rate of decline. The index fell for a second successive month from 46.3 to 46.0, signaling the largest monthly drop in sales since March and the thirteenth successive decline. The average decline for Q2 as a whole was the smallest since the second quarter of last year.
- Sales fell in France for the fifth successive month. The rate of deterioration slowed to near-stagnation to register the smallest monthly decline over this period and the best performance of the three countries. The index rose from 48.3 to 49.4. For Q2 as a whole, the decline was the weakest recorded over the past three quarters.
- Italy saw sales drop for the twenty-eighth consecutive month. The index rose from 46.5 to 47.0, registering the smallest monthly decline since October 2007. The rate of contraction has moderated since the record pace seen last November, meaning the average monthly drop in sales during Q2 was the smallest since Q2 2007.
Euro area retail sales were down from June 2008. The year-on-year sales index rose from 38.7 in May to 42.7. This upward movement pointed to an easing in the rate of decline from the severe pace seen one month earlier. Sales fell from a year ago in all three countries, led by Italy, which was also the only country to see an acceleration in the rate of decline. Germany reported the weakest overall year-on-year drop.
Sales by sector - fastest drop shown for autos, slowest for food & drink
Sales fell from levels of a year ago for all main product sectors. The autos sector saw the steepest fall, where a waning effect of government scrapping incentives caused the annual rate of decline to gather pace for the second month running. Rates of contraction eased for all other sectors with food & drink retailers reporting the smallest drop, followed by pharmaceuticals.
Sales against plans - targets missed in all three countries, led by Italy
Sales came in under targets on average in June. The extent of the shortfall remained below that recorded late last year in the aftermath of the Lehman Brother's collapse. The actual versus planned sales index registered 36.6, up from 35.8 in May but still below the 50.0 neutral mark. The largest disappointment against targets was seen in Italy, while German retailers reported the smallest shortfall. All product areas saw targets missed to similarly marked degrees.
Expected sales next month - expectations slip to five-month low
The index of expected sales fell for the third consecutive month in June. It sank to a five-month low and slipped below the 50.0 neutral mark for the first time since January, suggesting that the number of retailers expecting to miss targets in July exceeded the number that expect targets to be beaten. The index registered 49.8, down from 52.1 in May. Optimism about sales in France contrasted with pessimism in Italy and Germany.
Prices and margins - wholesale prices unchanged in June as index hits record low
The prices paid index hit a new record low in June, dropping from 52.2 in May to 50.0. It was the first time in the survey's five-and-half year history in which data indicated that prices had not risen. Weak underlying demand was reported to have encouraged wholesalers to price competitively. Prices fell overall in France, offsetting modest average increases in Italy and Germany.
Retailers' margins continued to deteriorate at a rapid pace in June. Despite benefiting from lower wholesale prices, subdued consumer demand meant retailers across all three countries lacked pricing power and suffered a further decline in gross margins. Italy again reported the sharpest fall. The seasonally adjusted index rose from 41.2 to 42.1, pointing to a moderation in the rate of margin deterioration.
Employment - retail payroll count falls at slowest rate for seven months
With margins being squeezed amid weak demand, employment was cut for the fifteenth month in a row in June. At 48.1, up from 47.3 in May, the Employment Index registered the smallest monthly fall in retail payroll numbers since last November, largely attributable to the slower rate of decline of sales in recent months compared to the record rates seen late last year. Germany saw the weakest fall of the three countries surveyed, while France recorded the steepest decline. In all three countries, the rate of job losses slowed compared to May.
Retailers' stock trends - record fall in inventories
Retailers cut back on their purchases of new stock for resale in June, reporting one of the steepest falls in the history of the survey, as firms sought to cut stock holdings in the face of weak sales prospects for coming months. The reduction led to a record contraction in stock holdings for the second successive month. Inventories fell at record rates in both France and Germany, and a near-record drop was seen in Italy.
