Eurozone Retail Sales Continue to Struggle with High Inflation, Tight Financial Conditions

Highlights

• Retail sales in Eurozone declined by 0.8% in February
• Automotive fuels sales fell by 1.8%, and food, drinks, and tobacco by 0.6%
• Retail sales expected to contract for the fifth consecutive quarter in Q1 2023

Overview

February Euro Zone retail sales declined, reversing the increase observed in the previous month.

The decline indicates that household spending is still facing pressure from high inflation and rising interest rates.

The volume of retail sales fell by 0.8% in February, compared to a revised increase of 0.8% in January.

Eurostat reported that on an annual basis, retail sales volume declined by 3.0% in the same month.

Lower sales of automotive fuels, which fell by 1.8%, and food, drinks, and tobacco, which decreased by 0.6%, caused the decrease in sales.

High inflation and tight financial conditions caused retail sales to struggle for the fifth consecutive quarter in the first three months of 2023, while consumer confidence in the Eurozone remains low.