Sales fell on both the month-on-month and year-on-year measures in each of the three largest euro countries:
* Italy continued to see the weakest sales performance of the three countries, with its month-on-month sales index dipping from 38.6 to 38.2 and extending the current sequence of decline to twenty-four months. The rate of decline remained substantially less than that seen through the final quarter of last year.
* In France, retail sales fell at a five-year survey record pace in February, a marked reverse from the marginal rise seen the previous month. The month-on-month index fell from 50.5 to 42.6 as consumers shunned the high street.
* Germany registered the smallest drop in retail sales of the three countries, and also saw the rate of decline moderate from the near-record pace seen in January. The month-on-month index for Germany rose from 41.7 to a four-month high of 45.4. Sales in Germany have fallen for nine successive months.
Sales by sector - all sectors reported falling sales, led by household goods
Euro retail sales fell below levels of a year ago for all main product categories in February. The steepest fall was seen for household goods, which posted a record year-on-year deterioration in revenues, followed by clothing & footwear. The smallest decline was reported by food & drink retailers, in contrasting the steep growth recorded in January. Autos & fuel retailers posted the smallest decline for nine months, linked in part to government financial incentives such as the scrap bonus (though the positive effects were reported to have diminished somewhat in France).
Sales against plans - targets missed in all three countries
The sales against targets index fell from 42.1 in January to 35.1, indicating that sales targets were missed by a wide margin and to a greater extent than at the start of 2009 (albeit less than the near-record shortfall seen in December). Targets were missed to greater extents than in January across all three countries, with the greatest disappointment registered in Italy and the smallest shortfall recorded in Germany.
All main product sectors reported that sales had been weaker than planned. Sellers of household goods reported that targets had been missed to the greatest extent, followed by clothing & footwear retailers. The smallest shortfall was seen at autos & fuel retailers.
Expected sales next month - expectations for March broadly neutral
Retailers across the single currency area are neutral in their expectations for meeting targets in March. The expectations index rose from 44.7 to 50.1, indicative of a negligible degree of optimism. The one-month sales outlook varied markedly by country, with positive expectations in France offset by pessimism in both Germany and Italy.
Divergent expectations were also evident according to product sector in February. Retailers of food & drink and autos & fuel are confident of meeting targets in March, contrasting with pessimism in the remaining three sectors covered.
Prices and margins - wholesale prices showed smallest rise for over three years
The rate of inflation of prices paid for goods by retailers fell in February to the lowest since December 2005. The price index dropped from 59.1 to 53.9. Any reading above 50.0 indicates an increase in average wholesale prices. Cost inflation moderated in all three main euro countries, with Italy registering a very modest rise in prices during the month and a record low. A 43-month low was posted in Germany. Prices rose in all product sectors except clothing & footwear, where prices were unchanged since January. The sharpest rise in prices was seen in pharmaceuticals.
The rate at which gross margins at euro-zone retailers deteriorated remained sharp in February, despite easing for the second month running from December's record. The margins index rose from 37.8 to 39.9. Retail profits fell at slower rates in all three countries. Italian retailers again reported the strongest overall decline.
Employment - rate of job losses matched December's record
Euro area retailers cut their employment levels for the eleventh consecutive month in February, with the rate of job losses matching December's five-year survey record. The employment index registered 47.4, from 47.5 in January. All three countries covered reported lower staffing levels, with the sharpest decline again seen in Italy. German retailers continued to shed staff at a marginal rate.
Retailers' buying and stock trends - purchases and stock levels both slumped at record rates
Retailers' stocks of unsold goods fell at the fastest rate yet recorded in the survey's five-year history, reflecting deliberate destocking in the face of falling sales and a bleak economic outlook. Stocks have now fallen for six successive months. The stocks index dropped from 48.3 to 46.9, reflecting record falls in stocks in Italy and France and a further drop in German retail inventories.
The value of goods purchased for resale by euro area retailers also fell at a new record pace in February, down for the seventh straight month. The buying index fell sharply from 43.7 in January to a new low of 40.3. Buying activity declined at sharper rates in both Italy and France (and at a record pace in the latter), while the pace of contraction eased in Germany.
