February saw a decrease in the level of retail
sales across the euro area as a whole, according to the latest retail PMI
(purchasing managers' index) data from
Markit, reversing the marginal gain observed during the opening month of the
year. Both Italy and France recorded faster contractions in sales, while growth
in Germany eased from January’s recent peak.
Eurostat reported on
Wednesday that Eurozone retail sales rose by 1.6% in January, following a dip in
At 48.5, down from January’s reading of 50.5, the Markit
Eurozone Retail PMI – which tracks month-on-month changes in the value of retail
sales – signalled a decrease in overall Eurozone retail sales for the fifth time
in the past six months in February. Trade was also down on the year, although
the annual rate of decline was the weakest since last August.
Commenting on the data, Phil Smith, economist at Markit
and author of the Eurozone Retail PMI, said:
"The retail numbers disappointingly showed a renewed
decline in sales, which takes some of the shine off yesterday’s composite
release that signalled a gathering of growth momentum in the Eurozone. Behind
the fall in the headline number were drops in the respective PMIs for Germany,
France and Italy, though it was only the latter two that posted outright
decreases in sales. Evidently, French and Italian consumers are yet to feel much
effect of the upturn in the wider area."
February survey data showed weaker trends in each of the big-three Eurozone
economies. Germany saw growth in sales for the tenth straight month, but
the rate of increase eased from January’s five-month high. Retailers operating
in France meanwhile noted a faster decrease in sales, though the latest
contraction – the sixth in successive months – was still only modest overall and
comparatively slower than that registered in Italy. There, trade fell
markedly and to the greatest extent for three months. The current downturn in
retail sales in the euro area’s third-largest economy reached the three-year
mark as a result.
Employment at retailers fell in line with the renewed decline in sales,
stretching the ongoing sequence of net job losses to six months. That said, the
rate of contraction was little-changed from the marginal pace recorded in
January. A faster rise in employment in Germany – the most marked in nine months
– cushioned further falls across both France and Italy.
Buying levels among Eurozone retailers also decreased on the month, and
at the fastest pace since November. Nevertheless, stocks of resale goods
were accumulated for a third straight
month as businesses recorded lower-than-planned sales. The degree to which
inventories rose was slower than in January, however, and only modest overall.
The rate of
purchase price inflation in the Eurozone retail sector eased slightly in
February, to the weakest in three months. This reflected slowdowns in both
France and Italy. Of the sectors monitored by the survey, Autos & Fuel saw the
slowest overall increase in cost burdens, and Pharmaceuticals the fastest. A
combination of increased costs and lower sales imparted pressure on retailers’
gross margins which fell sharply.
For the Retail PMI, Markit has recruited a
representative panel of retail companies in France, Germany and Italy. Together,
these three countries account for approximately 62% of total Eurozone retail
sales by value