Eurozone retail sales turned out much weaker than expected in February, contracting on the back of falls in Germany and Spain and reinforcing concerns about the outlook for economic growth.
Retail sales, an indication of consumer demand, in the 15 countries using the euro fell 0.5 percent month-on-month for an annual decline of 0.2 percent, the European Union's statistics office said on Thursday. "The renewed decline in retail sales in February does little for hopes that the consumer will ride to the rescue of the eurozone economy over the coming months," said Howard Archer, economist at Global Insight.
Economists polled by Reuters had expected a 0.2 percent monthly rise and no change year-on-year. Eurostat revised upwards January retail sales data to growth of 0.5 percent from 0.4 percent month-on-month and an increase of 0.2 percent annually from the previously reported 0.1 percent contraction.
"January's rise in retail sales may have been lifted by increasingly price conscious shoppers across the eurozone looking to take advantage of the New Year sales," Archer said. Economists pointed to rising inflation, fuelled mainly by food and energy prices, as eating away at consumers' disposable incomes and therefore overall demand.
Willingness to spend is also being curbed by uncertainty about the economic outlook and personal finances, as seen in the latest European Commission surveys, and higher market interest rates that have been boosted by turmoil on financial markets.
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