- Italy saw the steepest decline, with sales dropping for the fourth consecutive month. The index fell from 47.7 to 46.5, registering the strongest rate of contraction for fifteen months.
- France saw a fall in sales for the first time since March 2006, and the steepest rate of decline since January of last year (the index fell from 50.1 to 48.2).
- Germany showed the weakest contraction in retail sales of the three countries, and the rate of decline eased compared to May. Sales in Germany have fallen four times so far this year, having surged in late 2006.
Eurozone retail sales were down compared to a year ago for the second successive month. The year-on-year index rose from 46.7 to 48.6, signalling an easing in the annual rate of decline since May but again contrasted sharply with April's survey record high rate of growth. Year-on-year sales fell across all three countries, with Italy seeing the strongest decline followed by France.
Sales by sector
Auto sales showed a steep year-on-year decline in June and autos & fuel has recorded the sharpest decline of the five main sectors covered so far this year. Clothing & footwear and household goods sales meanwhile stabilised on last year in June, having fallen sharply in May, but growth for both sectors for Q2 as a whole has been well below the strong performances seen in Q1. Only in the food & drink and pharmaceuticals sectors was any noteworthy growth recorded in year-on-year sales. Moreover, in both sectors growth in Q2 has strengthened further on the robust rates of expansion seen in Q1.
Sales against targets
Monthly sales targets were missed by a wide margin again in June, disappointing to a degree only slightly less than the near two-year high shortfall seen in May. The index moved up from 38.2 to 39.4. Targets were missed in all three countries, led by France (where the shortfall was the greatest seen for fifteen months). Targets were also missed in all main sectors, with the largest disappointments seen in autos & fuel and clothing & footwear (the latter linked to poor weather).
The index of retailers' expectations of beating planned targets in the coming month fell to a five-month low of 56.3 (down from 60.1 in May). Expectations were lowest in the pharmaceuticals sector, followed by household goods and autos & fuel. Clothing & footwear and food & drink retailers were the most optimistic, largely reflecting hopes of better weather. By country, French retailers again showed by far the strongest optimism for beating targets. German retailers were pessimistic for the first time in five months.
Prices and margins
Prices paid for goods by retailers in the Eurozone continued to rise sharply in June, though the rate of inflation in recent months has remained well below that seen at the start of the year. The prices index recorded 57.0 from 57.4 in May, signaling a slight easing in the rate of increase. A sharp slowing in the rate of inflation in France to an eight-month low was in part offset by slight upturns in the rates of inflation in Germany and Italy, to five- and three-month highs respectively.
Retailers' gross margins fell at the steepest rate for four months in June. The index fell further from April's record high of 48.7 to 44.9 (46.0 in May). Margins deteriorated at increased rates in both Germany and France, while a weaker fall was seen in Italy (though it nonetheless again saw the steepest decline of the three countries).
Employment
Eurozone retail sector employment rose for the fourth successive month in June, though the rate of growth weakened further from May's modest pace. The index fell from 51.3 to 50.9. Marked national differences in staffing trends were evident, with continued (but unspectacular) growth in Germany contrasting with near-stagnation in Italy and a modest drop in employment in France.
Retailers' buying and stock trends
The amount of goods bought for resale by Eurozone retailers rose only marginally in June as buyers focused on keeping stocks low for cost considerations. Stocks of unsold goods nevertheless showed the second-largest rise seen so far this year, largely due to weaker-than-expected sales (particularly in France and Italy). The buying index fell from 51.5 to 50.5, while the stocks index rose from 52.3 to 52.6.
