Eurozone retail sales dropped 0.3% month-on-month in June, reversing May's gain as households pulled back on food and non-food purchases. The pullback still left annual sales growth positive, but it gives the European Central Bank another reason to stay patient on further tightening.
Eurozone retail trade volume fell 0.3% month-on-month in June, reversing a 0.4% rise in May. Sales across the wider EU slipped 0.1% after climbing 0.6% the prior month, yet consumer demand had not collapsed: eurozone sales still rose 0.7% from a year earlier, and EU sales gained 1.2%.
Weakness spreads across food and non-food goods
The decline was broad. Food, drinks and tobacco sales fell 0.5% in the Eurozone, while non-food purchases dropped 0.4%. Across the EU, the same categories slipped 0.4% and 0.3% respectively, pointing to the same cautious pattern on everyday spending.
Automotive fuel bucked the trend. Fuel sales rose 1.5% in the Eurozone and 1.7% across the EU, the only category to post a gain in both regions. That split suggests drivers kept spending even as shoppers held back on groceries and other goods.
National divergence reinforces the ECB's case for patience
Country-level data showed the same split. Finland, Romania and Germany recorded the largest monthly declines, while Luxembourg, Portugal, Croatia and Sweden posted the strongest gains, underlining how uneven demand remains across member states.
For the ECB, that combination supports patience on further tightening, especially as policymakers judge whether easing pipeline inflation can hold without fresh pressure from energy prices.
Source: ActionForex
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