Eurozone retailers recorded an increase in like-for-like sales in May according to the latest IHS Markit Eurozone Retail PMI report. While positive overall, the data highlighted a country level discrepancy: encouragingly high levels of growth in Germany and France counterbalanced a continuing decline in retail sales in Italy.
The IHS Markit Eurozone Retail PMI (measuring month-on-month changes in like-for-like retail sales in France, Germany, and Italy) was measured at 52.0. Decreasing from 52.7 in April, the reading points to a solid though slightly weaker rise in sales for the month.
Conversely, sales were down on an annual basis and the data showcased across the board under performance by retailers. All three countries reported gaps between forecast and actual sales with the highest discrepancy recorded in Italy.
Gross margins fell sharply as retailers were faced with a rise in average purchasing costs. Input price inflation was reported in all three economies, most markedly in Germany.
High levels of purchase activity were also reported, catalyzed by high sales volumes and contributing to a continuing increase in stocks of goods for resale.
Finally, the data showed a rise in retail sector employment, continuing a trend which began in November 2015.
Alex Gill of IHS Markit concludes, “Overall the data paint a positive picture of the euro area retail sector. However, a sharp fall in gross margins suggests the business climate remains challenging”.