Retail sales volumes plunged 1.2 per cent in just a month, Eurostat data published yesterday revealed, meaning that sales are 3.6 per cent lower than just a year ago.
The worst fall came in Portugal, where sales dived some 4.5 per cent between September and October. This was followed by the previously resilient Finland and Germany whose sales fell three per cent and 2.8 per cent respectively, making them responsible for the lion’s share of the overall drop in Eurozone sales.
Bailed-out Ireland, recovering slowly from its debt crisis, saw retail sales up 1.9 per cent on the month, the best result across the bloc.
On an annual basis, the volume of sales was 11.5 per cent lower in October than a year ago, and Portuguese sales volumes sunk 6.7 per cent over the period.
By contrast Latvia and Luxembourg – relatively untouched by the debt crisis – saw growth close to double figures, and Estonia – which underwent a highly successful austerity programme – saw growth of 6.4 per cent over the year.
All areas of the market by product type saw sales fall. Food, drinks and tobacco volumes sagged 0.8 per cent over the month, while fuel for cars fell 0.1 per cent, and non-food sales were down 1.4 per cent.
Analysts said the gloomy data added to evidence that the fourth quarter would see an even worse contraction in GDP across the currency bloc. “We think the fourth quarter will be the worst in terms of growth,” said Evelyn Herrmann at BNP Paribas. “With periphery countries contracting and even the core going through a cyclical downswing, Eurozone GDP is likely to fall by some 0.4 per cent.”
And Howard Archer at IHS Global Insight warned that still-high inflation could further squeeze consumer spending going forward.