Eurozone September retail sales drop 0.7%, missing forecasts

• Retail sales m/m -0.7% vs -0.1% expected
• Prior +0.1%
• Retail sales y/y +0.4% vs +0.6% expected
• Prior +0.8%
• Full report

Retail sales across the eurozone fell by 0.7% month-on-month in September, a steeper decline than the 0.1% drop that had been anticipated. Germany saw the biggest monthly contraction, with a 2.0% decrease. Across the entire EU, retail sales were down 0.6% on the month. Non-food products led the downturn, with volumes sliding 1.2% in the euro area and 1.0% in the EU. Sales of food, drinks and tobacco also fell, by 0.3% and 0.4% respectively. Automotive fuel was the only category to post growth, rising 1.0% in the eurozone and 0.1% across the EU.

Compared with a year earlier, retail trade volumes remained in positive territory, rising 0.4% in the euro area and 0.9% in the EU. Still, both figures came in below expectations. Within the eurozone, food, drinks and tobacco recorded the strongest annual increase at 1.1%, followed by non-food products at 0.7%. Automotive fuel sales continued to struggle, dropping 3.0% year-on-year.

The September data signals weakening consumer demand, driven by elevated interest rates and high energy costs. The retail sales report rarely moves markets and does not alter the outlook for the ECB, which continues to focus on inflation.