Eurozone retail sales slide further

(BRUSSELS) - Retail sales in the 16 nations using the euro fell again in September, continuing a downward trend as consumers remained cautious, according to official EU data released on Thursday.

The volume of retail sales in the eurozone fell 0.7 percent over the month in the eurozone and 3.6 percent compared to sales in September 2008, the European Union's Eurostat data agency said.

Across the 27-nation bloc as a whole, retail trade also weakened, contracting by 0.4 percent in September and by 2.5 percent over one year.

Those EU figures were worse than the data in August and showed the downward trend gathering pace after a slight increase in retail sales in July.

On a national basis, there were some retail trade rises, led by a 2.5 percent increase in Austria and a 1.1 percent rise in Slovakia.

Underlining the national differences there were at the same time drops of 2.0 percent in Portugal, 2.4 percent in Estonia and 7.6 percent in Lithuania.

Howard Archer, chief economist at IHS Global Insight in London, described the figures as unexpected and disappointing.

"It is likely that the retail sales data modestly understate the current strength of consumer spending in the eurozone as they do not include car sales which have been lifted substantially in a number of countries by 'cash for clunkers' schemes," he said.

Indeed such schemes may be diverting some spending away from retail sales.

"It still seems highly probable that the eurozone returned to growth" in the third quarter," Archer added.

"Nevertheless, significant doubts and uncertainties remain about the future strength of consumer spending across the eurozone, and it may very well limit hold back overall growth."

Further details - Eurostat