The monthly decline resulted in an annual rate of contraction that was without precedent in the survey history. The year-on-year sales index hit a new low of 35.1, down from 38.8 in November.
Retail sales continued to fall on both measures in all three countries covered:
- Italy recorded the steepest rate of decline of retail sales among the three countries by a wide margin, continuing the trend seen throughout much of 2008. The monthly sales index recorded 31.9, up from the survey low of 28.5 seen in November but still signaling a particularly steep rate of decline by the survey's historical standards. Measured against the same period a year ago, Italian retail sales showed by far the steepest drop on record (16.6).
- Sales fell sharply in Germany, registering the third-steepest monthly fall in the series' history. The month-on-month index rose modestly from November's record low of 41.3, to 42.3. In year-on-year terms the rate of decline also eased, but only marginally from November's forty-nine month low.
- Retail sales again showed some resilience in France, registering the slowest monthly rate of decline of the three countries surveyed. Sales still fell at the fastest pace since April as consumers continued to rein in spending in the face of economic uncertainty. The month-on-month index fell from 48.7 in November to 47.3. Sales were well down on a year ago, posting the second-largest annual fall in almost three years.
Sales by sector - sales fell in all sectors except food, led by record drop in autos
Compared to a year ago in December, sales fell in all sectors except food & drink, where growth slowed to a modest pace. The largest drop in sales was again reported by autos & fuel retailers. Retailers of household goods, clothing & footwear and pharmaceuticals all reported similarly marked annual rates of decline.
Sales against plans - sales substantially lower than planned
The sales against targets index fell for the fourth month running in December, down from 32.4 in November to a near-record low of 30.9. The largest shortfall was again seen in Italy. In Germany, targets were missed to the greatest extent since May 2004 while, in France, the shortfall was the largest in eight months. By product sector, the shortfall of sales against targets was again most pronounced for autos & fuel, followed by household goods.
Expected sales next month - record degree of pessimism signaled
Retailers grew increasingly pessimistic regarding the one-month outlook for sales in December. The expectations index plummeted from 47.0 in November to an all-time low of 34.1, indicating that survey respondents expect to miss sales targets in January to the greatest extent in the five-year survey history. Record levels of pessimism were registered across all three countries, with German retailers the most downbeat.
Targets are expected to be missed across all product sectors in January. Pessimism amongst auto & fuel retailers about January sales targets eased modestly from the record low posted in the November results. New survey lows were seen for household goods and pharmaceuticals.
Prices and margins - price pressures eased to three-year low, but margins showed record deterioration
Average prices paid by euro-zone retailers for goods for resale continued to rise in December, but the rate of inflation eased further from the peak seen last summer, dropping to its lowest since December 2005. The prices index fell from 56.9 to 54.6. Wholesale price inflation slowed in Germany and Italy. Marginal acceleration was seen in France. Generally, wholesale price inflation has fallen sharply in every country from the peaks seen earlier in 2008. Prices fell compared to November in autos & fuel and clothing & footwear.
Despite the easing in wholesale price inflation, gross margins at euro-zone retailers suffered the largest deterioration seen over the survey's five-year history. The margins index fell from 38.1 in November to 36.6. Margins deteriorated at faster rates across all three countries, led by a record decline in Italy.
Employment - jobs in retail shed at fastest rate in over four years
Eurozone retailers cut staffing levels for the ninth successive month in December and to the greatest extent since October 2004. The employment index slipped from 48.2 to 47.4. Italy saw the largest cut in retail employment for the third month running and posted the steepest decline in the survey's history. Germany saw the smallest cut in retail employment, with the rate of decline slowing to only a marginal level.
Retailers' buying and stock trends - discounting contributed to lower stocks
Stocks of unsold retail goods fell in December, posting one of the largest declines in the five-year survey history as increasing numbers of retailers sought to reduce inventories in the expectation of persistent weak demand in the coming months. Stocks have fallen for four consecutive months. Retailers achieved cuts by discounting as well as reducing purchases of new stock. The value of goods purchased by Eurozone retailers fell for the fifth successive month, registering the third-largest monthly cut in the survey history. At 44.4, the buying index remained well below the no-change level of 50.0, rising only slightly from 44.1 in November. A record fall in purchases by Italian retailers was accompanied by more modest reductions in Germany and France.
