Consumers in the euro zone reined in spending in March, confounding expectations that they would keep their wallets wide open despite a weakening economy, official EU retail data show today.
The volume of retail trade in the euro zone fell 0.4% in March from February and slumped 1.6% over 12 months, the European Union's Eurostat data agency said.
The data defied economists forecasts for retail sales to rise 0.3% over one month in the face of record inflation and growing signs that the euro zone economy is losing pace.
The March data also marked a slowdown from February when sales eased 0.2% from January and rose 1% over 12 months, Eurostat said, revising upwards a provisional estimate for February.
Analysts said that despite still improving labour markets and higher wage settlements in some countries - notably Germany - euro zone consumers are clearly reluctant, or unable, to lift their spending.
They said that consumers were beginning to feel the pinch of 'elevated inflation, tighter credit conditions, higher interest rates, heightened concerns over the economic outlook and worries about long-term personal finances.'
Weaker retail sales in France weighed on the overall figures, falling 0.7% over one month and 0.8% over 12 months. Germany fared only slightly better with retail sales in the regional economic heavyweight slipping 0.1% over one month and 1.1% over one year.
In the 27-nation EU, retail sales fell 0.7% but rose 0.4% over 12 months.
