EURO ZONE retail sales declined by 0.2 per cent in August compared with July, according to new figures published yesterday.

The Eurostat data also shows that retail trade in the European Union as a whole was down 0.3 per cent over the same period.

During the 12 months to the end of August, retail sales fell by 2.6 per cent in the 16 countries using the euro and by 1.8 per cent in the EU27.

The highest retail sales increases were observed in Poland and Spain, and the largest decreases in Latvia, Sweden, Lithuania and Austria.

Sales in the food, drinks and tobacco segment rose by 0.5 per cent in August compared with July in the euro zone and by 0.3 per cent in the European Union as a whole.

During the 12 months to the end of August, sales in the segment fell by 1.3 per cent in the euro zone and by 0.3 per cent in the EU27.

The non-food sector declined by 3.2 per cent and 2.1 per cent respectively over the same period.

Economists polled by Reuters had expected a 0.5 per cent fall versus the previous month, while the annual decrease came in line with their forecasts.

“In general, these figures confirm moderate signs of stabilisation in consumer spending,” said Giada Giani, analyst at Citigroup.

However the figure was too weak to suggest any big role for consumers in an expected economic revival in the third quarter.

Growth would instead depend mostly on government spending as tens of billions of euros are being pumped into the economy.

“The presumed recovery in GDP [gross domestic product] in the third quarter is unlikely to be consumer-led,” said Martin van Vliet, analyst at ING.

The data comes as the European Central Bank is expected to keep its main interest rate at 1 per cent this week amid signs that the worst European recession since the second World War may be ending. – (Additional reporting: Reuters)