Economy in Brief: 2025

European Monetary Union (EMU) retail sales in October were flat. Food & beverage sales rose by 0.3%. The profile on sales continues to be weak although from 12-months to six-months to three-months sales are still growing. However, the growth rates are decelerating sequentially. Total sales volumes grow by 1.5% over 12 months, advance at a 0.6% annual rate over six months, and gain at an even slower 0.4% annual rate over three months. Food & beverage volume spending rises by 1% over 12 months and at a 2.1% annual rate over three months after declining 0.4% over six months.

Quarter-to-date total euro area sales volumes are rising at a 0.4% rate while food volume is rising at a 1.9% annual rate. None of this is impressive.

Motor vehicles show healthier trends Motor vehicle sales have shown some life the last two months after falling 10.8% in August; they snapped back, rising by 11.3% in September and now, in October, there's a further 2.5% increase month-to-month. Over 12 months vehicle sales rise by 4.5%, over six months sales slow to a 1.8% annual rate, but then, over three months, they pick back up to grow strongly at a 7.4% annual rate. As a result of these gyrations, motor vehicle sales volumes are up at a 40.8% annual rate in the quarter-to-date, that's one-month into the fourth quarter.

Country level retail performance On a country-by-country basis, we have a smattering of results from Monetary Union members and other European reporters. In October, among the seven individual countries reporting, there are sales declines in three of them; in Germany sales fell by 0.3%, in Sweden they fell by 0.3%, and in the United Kingdom volumes fell by 1.1%. In addition, sales were flat in Spain in October and flat in Norway as well. Only Denmark and the Netherlands logged sales increases. Dutch sales rose 2.6% month-to-month while Danish sales rose by 0.9% month-to-month.

Sequential country sales patterns Sequentially, looking at annualized growth rates over 12 months, six months and three months, there are steady decelerations in two countries in the table: Germany and Norway. For Germany sales grow 0.9% over 12 months but move on to contract at a 1.7% annual rate over three months. For Norway sales rise by 3.4% over 12 months, then contract at a 1.2% annual rate over three months. There's a slight acceleration in sales in Denmark as sales grow 3.8% over 12 months, rise at 3.9% annual rate over six months, and then advance at a 5.4% annual rate over three months. However, the rest of the countries in the table produce unclear trends.

On a quarter-to-date basis, motor vehicles are surging, rising at a 40.8% annual rate, and providing the clearest notion of all being well. Country level retail sales excluding autos are growing most strongly in the Netherlands, at an 11.1% annual rate, followed by Denmark with a 6.7% annual rate and Spain at a 2.6% annual rate. Swedish QTD sales grow at a 1.5% annual rate, as sales volumes in Germany, the United Kingdom, and Norway show declines. U.K. sales fall at a 2.7% annual rate, German volumes fall at 1.5% annual rate, and Norwegian volumes fall at a 1.4% annual rate.

Results since January 2020 The COVID and post COVID period results to date have been marked by significant weakness. Retail sales since January of 2020 show total Euro-Area sales volumes are up by 5.7%, that's barely 1% per year. Food and beverage volumes are up by only 1% on a net basis. By country, the UK shows sales falling on balance by 3.7% on this five- and three-quarter-year horizon. Sales rise 1.7% in Sweden, 3.6% in Germany, and 4.1% in Norway. There are slightly more substantial sales in Denmark with a gain of 5.5%. The Netherlands show a net sales gain of 6.9%, and Spain logs a net rise of 9%. So, the Spanish numbers are quite solid. The Dutch and Danish numbers are moderate, and apart from that the other sales numbers are quite weak. These sales results span a period of 5 ¾ years and over such a period we would expect more substantial gains than what these countries are reporting now. Compounded a 1% per-year gain would results in a 5.9% increase in sales on this period. However, over this span vehicle sales are lower by 8.9%. That’s a substantial setback over such a period. Only two countries surpass that marker, and one other one comes close. The overall euro area number comes close (5.7%).

Summing up Retail sales numbers do not signal recession; however, they continue to point to very weak retail sales. Vehicle sales have picked up recently and have showed increases in all three horizons and that's certainly a bright spot and welcome after a long span of underperforming. Across the European Monetary Union, consumer confidence continues to lag and that weakness is reflected in the ongoing sluggishness in retail sales.