Bloomberg PMI Shows Record Annual Fall in Euro Retail Sales
Signals steepest drop in year-on-year sales in survey history, and expectations slump to new low
NEW YORK/PRNewswire/ -- The latest Bloomberg Euro-Zone
Retail Purchasing Managers' Index ("PMI(R)"), based on a mid-month
survey of economic conditions in the euro area retail sector, signaled
a further sharp drop in sales in the important trading month of
December. Margins fell at a record rate. Retailers' expectations of
meeting sales targets next month collapsed to a new low. Meanwhile,
wholesale price pressures eased to a three-year low.
The Retail PMI, which provides data one month ahead of
government-issued figures and is based on a survey of more than 1,000
retail executives in Germany, France and Italy, indicates the
second-steepest month-on-month drop in sales in the five-year survey
history in December, a decline exceeded only by November's record fall.
The PMI registered 41.4, compared to 40.6 in November. Monthly sales
have fallen continuously since June.
The monthly decline resulted in an annual rate of contraction that
was without precedent in the survey history. The year-on-year sales
index hit a new low of 35.1, down from 38.8 in November.
Retail sales continued to fall on both measures in all three countries covered:
-- Italy recorded the steepest rate of decline of retail sales among the
three countries by a wide margin, continuing the trend seen throughout
much of 2008. The monthly sales index recorded 31.9, up from the
survey low of 28.5 seen in November but still signaling a particularly
steep rate of decline by the survey's historical standards. Measured
against the same period a year ago, Italian retail sales showed by far
the steepest drop on record (16.6).
-- Sales fell sharply in Germany, registering the third-steepest monthly
fall in the series' history. The month-on-month index rose modestly
from November's record low of 41.3, to 42.3. In year-on-year terms the
rate of decline also eased, but only marginally from November's
forty-nine month low.
-- Retail sales again showed some resilience in France, registering the
slowest monthly rate of decline of the three countries surveyed.
Sales still fell at the fastest pace since April as consumers
continued to rein in spending in the face of economic uncertainty. The
month-on-month index fell from 48.7 in November to 47.3. Sales were
well down on a year ago, posting the second-largest annual fall in
almost three years.
Sales by sector - sales fell in all sectors except food, led by record drop in autos
Compared to a year ago in December, sales fell in all sectors except
food & drink, where growth slowed to a modest pace. The largest
drop in sales was again reported by autos & fuel retailers.
Retailers of household goods, clothing & footwear and
pharmaceuticals all reported similarly marked annual rates of decline.
Sales against plans - sales substantially lower than planned
The sales against targets index fell for the fourth month running in
December, down from 32.4 in November to a near-record low of 30.9. The
largest shortfall was again seen in Italy. In Germany, targets were
missed to the greatest extent since May 2004 while, in France, the
shortfall was the largest in eight months. By product sector, the
shortfall of sales against targets was again most pronounced for autos
& fuel, followed by household goods.
Expected sales next month - record degree of pessimism signaled
Retailers grew increasingly pessimistic regarding the one-month
outlook for sales in December. The expectations index plummeted from
47.0 in November to an all-time low of 34.1, indicating that survey
respondents expect to miss sales targets in January to the greatest
extent in the five-year survey history. Record levels of pessimism were
registered across all three countries, with German retailers the most
downbeat.
Targets are expected to be missed across all product sectors in
January. Pessimism amongst auto & fuel retailers about January
sales targets eased modestly from the record low posted in the November
results. New survey lows were seen for household goods and
pharmaceuticals.
Prices and margins - price pressures eased to three-year low, but margins showed record deterioration
Average prices paid by euro-zone retailers for goods for resale
continued to rise in December, but the rate of inflation eased further
from the peak seen last summer, dropping to its lowest since December
2005. The prices index fell from 56.9 to 54.6. Wholesale price
inflation slowed in Germany and Italy. Marginal acceleration was seen
in France. Generally, wholesale price inflation has fallen sharply in
every country from the peaks seen earlier in 2008. Prices fell compared
to November in autos & fuel and clothing & footwear.
Despite the easing in wholesale price inflation, gross margins at
euro-zone retailers suffered the largest deterioration seen over the
survey's five-year history. The margins index fell from 38.1 in
November to 36.6. Margins deteriorated at faster rates across all three
countries, led by a record decline in Italy.
Employment - jobs in retail shed at fastest rate in over four years
Eurozone retailers cut staffing levels for the ninth successive
month in December and to the greatest extent since October 2004. The
employment index slipped from 48.2 to 47.4. Italy saw the largest cut
in retail employment for the third month running and posted the
steepest decline in the survey's history. Germany saw the smallest cut
in retail employment, with the rate of decline slowing to only a
marginal level.
Retailers' buying and stock trends - discounting contributed to lower stocks
Stocks of unsold retail goods fell in December, posting one of the
largest declines in the five-year survey history as increasing numbers
of retailers sought to reduce inventories in the expectation of
persistent weak demand in the coming months. Stocks have fallen for
four consecutive months. Retailers achieved cuts by discounting as well
as reducing purchases of new stock. The value of goods purchased by
Eurozone retailers fell for the fifth successive month, registering the
third-largest monthly cut in the survey history. At 44.4, the buying
index remained well below the no-change level of 50.0, rising only
slightly from 44.1 in November. A record fall in purchases by Italian
retailers was accompanied by more modest reductions in Germany and
France.
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Source: Bloomberg
CONTACT: Kristin Swenson, Bloomberg LP, 
+1-212-617-4264
,
kswenson@bloomberg.net
Web Site: http://www.bloomberg.com/
NOTE TO EDITORS: The Bloomberg Retail PMI report is first published
exclusively for Bloomberg users via the BLOOMBERG PROFESSIONAL(R)
service at 09:00 GMT, followed by a general press release and analysis
on BLOOMBERG TELEVISION. Data are published on the penultimate working
day of each month. Forthcoming data will be released on the following
dates: -- January data: Released 29 January 2009 -- February data:
Released 26 February 2009
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