Global| Sep 05 2007EU Retail Trends: At Odds
Summary
Euro area sales trends point lower. Food as well as nonfood trends are on the decline. These trends are weighted significantly toward the trends for Germany where the recent deterioration is severe. The UK (an EU not EMU member) and [...]
Euro area sales trends point lower. Food as well as nonfood trends are on the decline. These trends are weighted significantly toward the trends for Germany where the recent deterioration is severe. The UK (an EU not EMU member) and France on the other hand still have relatively strong trends in force.
Detailed data lag by one month but they show weakness in household items, books and other spending. Pharmacy and textile spending has held up.
We can calculate the growth in the new quarter which is one month old by assessing the July growth rate of sales over the Q2 average and annualizing it appropriately. In Q3 total retail sales volumes in the Euro area are growing at a 1.2% pace; for nonfood items the pace is 2.2%.
We are past the point of being able to blame Germany’s VAT tax for the weakness. Year/year measures will still be impacted by that effect but three-month trends are free from it and they are weak. Germany has not been able to engage its consumer in the recovery. So far that has not been a problem since having an industry-led recovery is normal for Germany. But now, just when the consumer is expected to show up, the financial turmoil could keep the wary Germany consumer away. Italy already is weakened. France is ripe for a slowdown and, after some real post election euphoria, Europe faces question marks over the future of consumer spending.
| Jul-07 | Jun-07 | May-07 | 3-Mo | 6-Mo | 12-Mo | |
| Zone-13 Total | 0.1% | 0.6% | -0.8% | -0.5% | 1.6% | 0.7% |
| Food | 0.2% | -0.1% | -0.8% | -2.7% | 0.2% | -1.2% |
| Non-food | -0.1% | 1.0% | -0.8% | 0.8% | 2.7% | 2.1% |
| Textiles | #N/A | 2.8% | -3.5% | 2.8% | 2.6% | 4.0% |
| Household Goods | #N/A | 1.4% | -0.4% | 0.1% | -2.2% | 3.5% |
| Books news | #N/A | 1.3% | -0.9% | 0.8% | 1.5% | 2.7% |
| Pharmaceuticals | #N/A | 0.1% | 0.5% | 2.9% | 2.3% | 3.0% |
| Other Non-special Goods | #N/A | 1.2% | -0.8% | -1.7% | -1.2% | 0.1% |
| Mail Order | #N/A | -0.2% | 1.3% | 7.3% | -5.5% | 0.1% |
| Non-Food Country Detail: Volume | ||||||
| Germany | -0.6% | 2.8% | -4.3% | -8.5% | 6.9% | 0.7% |
| France | #N/A | 1.1% | 0.1% | 5.4% | 6.1% | 6.1% |
| Italy (Total Value) | #N/A | 0.0% | -0.2% | -3.0% | -1.8% | -1.2% |
| UK (EU) | 0.9% | 0.9% | 0.4% | 9.1% | 10.1% | 8.0% |
| Shaded areas calculated on a one-month lag due to lagging data | ||||||
| The EA 13 countries are Austria, Belgium, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal, Slovenia and Spain. | ||||||
Robert Brusca
AuthorMore in Author Profile »Robert A. Brusca is Chief Economist of Fact and Opinion Economics, a consulting firm he founded in Manhattan. He has been an economist on Wall Street for over 25 years. He has visited central banking and large institutional clients in over 30 countries in his career as an economist. Mr. Brusca was a Divisional Research Chief at the Federal Reserve Bank of NY (Chief of the International Financial markets Division), a Fed Watcher at Irving Trust and Chief Economist at Nikko Securities International. He is widely quoted and appears in various media. Mr. Brusca holds an MA and Ph.D. in economics from Michigan State University and a BA in Economics from the University of Michigan. His research pursues his strong interests in non aligned policy economics as well as international economics. FAO Economics’ research targets investors to assist them in making better investment decisions in stocks, bonds and in a variety of international assets. The company does not manage money and has no conflicts in giving economic advice.
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