Data from Eurostat showed that retail sales declined by 1.2% in August, accelerating compared to July (-0.1%, revised from -0.2%) and pointing to weaker consumer demand as inflation remains high. This was the sharpest decline this year. Economists had expected a 0.3% decline. This may help convince the ECB to keep interest rates unchanged, especially if inflation continues to decline, along with falling demand for goods and labor.
In annual terms, retail sales fell by 2.1% (the largest drop since May) after declining by 1% in July. Consensus estimates suggested a 1.2% drop. As for the EU countries, retail sales fell by 0.9% on a monthly basis and by 2.0% compared to August 2022.
The data showed that in the eurozone the volume of retail trade decreased by 3.0% for automotive fuels, by 1.2% for food, drinks and tobacco and by 0.9% for non-food products. In the EU, the volume of retail trade decreased by 2.4% for automotive fuels, by 0.9% for food, drinks and tobacco and by 0.6% for non-food products.
The annual drop in retail sales in the eurozone was caused by a decline in trade in automotive fuels (-7.7%), food, drinks and tobacco products (-3.2%) and non-food products (-0.2%).
As for the EU countries, the largest yearly decreases were registered in Slovenia (-21.5%), Belgium (-8.5%) and Estonia (-7.9%). The highest increases were observed in Luxembourg (+8.7%), Spain (+8.1%) and Cyprus (+5.9%).