Retail Sales Unlikely To Improve Notably In The Months Ahead

Eurozone February retail sales were -0.7% Y/Y WDA (vs -0.8% cons). January’s reading was revised 0.1pp higher to -0.9% Y/Y. On a monthly basis, sales were -0.5% M/M SA (vs -0.4% cons, 0.1pp downwardly revised 0.0% prior).

• All major subcomponents saw negative growth on an annual and monthly basis, though sales of non-food products rose to -0.1% Y/Y (vs -0.7% prior).
• At a country level, Germany saw the largest M/M fall in sales volumes (-1.9% M/M), while Belgium saw the largest Y/Y fall (-6.8% Y/Y).
• Retail sentiment in the EC’s business survey has been in contractionary territory for over 2-years now, though the March reading improved a touch to -5.7 (vs -6.6 prior).
• However, expected orders from the EC’s survey fell to -8.0 (vs -7.3 prior) in March, leaving little optimism for a pickup in sales volumes in the coming months.
• Analysts currently expect Eurozone Q1 household consumption at 0.7% Y/Y, above the 0.4% Y/Y forecast seen in late-2023.