Brussels: Retail sales in the euro zone fell across the board for the first time in three months in June, official data showed on Monday, highlighting the drag of depressed household spending on the bloc’s fragile recovery.
The European Central Bank hopes for a gradual overall improvement later this year in the health of the 17-member single currency area, likely to be driven mainly by exports and a low interest rate environment.
France bucked the trend by registering an increase, but for the bloc as a whole the volume of retail trade fell broadly in line with expectations by 0.5 per cent on the month. That followed a revised 1.1 per cent rise in May, the EU’s statistics office Eurostat said on Monday.
Retail sales dropped by 0.9 per cent on the year, against expectations of a 1.2 per cent decline by economists polled by Reuters, following a revised 0.3 per cent increase in May.
Shoppers in the euro zone spent more on automotive fuel in June, but it was not enough to offset a 0.6 per cent drop in spending on food, drinks and tobacco and a 0.2 per cent decrease in purchases of non-food items such as electronics, clothing and else.
The bloc’s largest economy Germany saw a 1.5 per cent monthly fall in retail sales in June, the biggest decline since December last year, and sales volume in Spain was down 0.8 per cent.
France, the bloc’s second largest economy, registered a 0.6 per cent increase, following a 1.6 per cent jump in May.
Across Europe, households are dealing with the aftermath of the 2008/2009 global financial crisis and the euro zone is in its longest recession since the creation of the euro in 1999.
Weak consumer spending is a concern for the ECB, which lowered its main interest rate to a record low of 0.50 per cent in May, and said it will keep low rates for an extended period to help recovery to gain traction.
