European Union: Retail sales show deep recession

Retail trade sales are to be found in the core of effective demand in every advanced economy. Being the driving force behind consumer spending they are considered as the main indicator for the general course of the economy, that is if it grows or recedes. Unfortunately for Eurozone and for the European Union in general retail sales indices have followed a downward path for quite some time now. According to Eurostat, the European Union statistical service, this discouraging course of the retail sales indices also continued during last March. This is the most recent available data on this crucial variable for the Eurozone and the European Union as a whole. They constitute an infallible witness that Eurozone and the EU are well into a recession, without any signs of change. Fewer sales In detail, according to Eurostat, “in March 2013 compared with February 2013 the volume of retail trade fell by 0.1% in the euro area and by 0.2% in the EU27. Those tiny decimal points may seem non important, but they describe the losses of retail sales from month to month. On a yearly base the fall is much more sizeable. In March 2013 compared with March 2012, the retail sales index dropped by 2.4 % in the euro area and by 1.6% in the EU27. There are also noticeable differences in the tempo of retail sales losses or gains between the various sectors of the economy. Understandably retail sales in the food sector are less sensitive with regard to the overall conjuncture of the economy, while the e non-food sectors are more variable. For example in the present recession period, the monthly comparison of the retail sales index of March 2013 in relation to February 2013, sales in the sector of “Food, drinks and tobacco” rose by 0.8% in the euro area and by 1.0% in the EU27. In the non-food sector sales decreased by 0.5% and 0.6% respectively. As for the annual comparisons in March 2013, compared to March 2012, sales in the sector of “Food, drinks and tobacco” fell by 1.2% in the euro area and by 0.6% in the EU27. The non-food sector lost 3.3% and 2.0% of its sales respectively, during the same twelve month period. There are also important differences between the EU member states as far as retail sales are concerned. It is quite understandable that retail sales in Greece follow a different course than the same variable in Germany. Actually the differences are so big that they remind comparisons between advanced and developing economies. On an annual base in March 2013 among the Member States for which data are available, total retail trade fell in fourteen and rose in seven. The largest decreases were observed in Spain (10.5%), Slovenia (7.7%) and Portugal (5.9%), and the highest increases in Latvia (+8.8%), Lithuania (+4.5%) and Sweden (+3.0%). There is no doubt that retail sales follow or rather lead the general developments in every economy.