July data for the three major Eurozone economies that constitute the survey signaled that France recorded the sharpest growth in retail sales for the second month running (57.7). The rate of growth in German retail sales eased further from May's high, but was solid nevertheless (54.2). Meanwhile, Italian retail sales declined for the sixth month running (47.6).
The underlying upturn in demand signaled by July's survey was further highlighted by a fourth straight rise in annual sales (51.6). However, the pace of expansion eased to its lowest in the current growth period, as the rates of increase in Germany and France slowed. Year-on-year retail sales in Italy continued to fall.
Employment
Eurozone retailers expanded their workforces for the fourth month running (on average) in July. Moreover, the rate of jobs growth in the sector picked up further to reach a new survey high (52.7). Growth of average workforces was broad-based across the German, French and Italian retail sectors during the month, with the sharpest increase seen in France -- in line with the pattern for retail sales.
Margins and Prices
Higher average purchasing costs and ongoing promotional campaigns continued to be the main forces driving retailers' gross margins lower in July (44.1). The rate of decline in profits picked up slightly since June, and Italian retailers posted the steepest fall in margins of the principal Eurozone economies. However, the latest fall in margins was weaker than the long-run average for the survey.
Eurozone retailers' average purchase prices increased at the sharpest rate since April 2004 in July (59.5). Moreover, the rate of inflation was the second-highest indicated by the survey to date. Anecdotal evidence suggested a strong link between higher supplier rates and recent highs in global oil prices.
Retailers' Stocks
The value of goods ordered for resale by retailers in the Eurozone increased in July compared to one month earlier, as it has in every month since March (52.4). Retailers mostly linked higher purchases to growth in sales turnover and efforts to build stocks, which expanded for the tenth consecutive month (54.3).
Sales Against Targets
Although retail sales in the Eurozone continued to increase on both a monthly and an annual basis in July, retailers reported that they continued to miss targets (41.5). Moreover, the shortfall in sales against plans was greater than in May and June, and retailers were generally pessimistic regarding August targets (49.3).
The Bloomberg Eurozone Retail PMI is the first monthly report of its kind in Europe, providing businesses, governments, central banks, economists and analysts the most accurate and up to date insights and data into the Eurozone retail sector.
The index, compiled exclusively for Bloomberg by NTC Economics Ltd, questions more than 1,000 retail executives in Germany, France and Italy. These countries together represent approximately 75% of total Eurozone retail sales. National data are weighted together according to each country's contribution to total Eurozone retail sales to form the Bloomberg Eurozone Retail PMI.
The survey tracks changes in retail sales, performance against sales targets, inventories, prices, employment and other key indicators. Data are published approximately one month ahead of government figures.