Retail sales in the euro zone fell by 0.3% in January, a slightly better performance than expected, the Eurostat statistics office said today.
Analysts had predicted a fall of 0.5% in January, as cash-strapped consumers resisted the temptations of the January sales after the annual Christmas splurge.
Retail sales also dropped by 0.3% in the 27-nation European Union as a whole.
Analysts said that discretionary spending appears to have been particularly muted in January as sales of non-food products fell by 0.6% month-on-month and 1.5% year-on-year.
Even allowing for the very bad weather in January, they said that the data maintain suspicion that consumer spending is likely to be pretty muted across the euro zone over the coming months, thereby limiting overall growth prospects.
Last January the sales rose in both the EU and the euro zone. This time round the strongest sales gain was recorded in Sweden, up 3.4% while the worst performance was by Latvia, where retail sales were down 16% over the month with Lithuania and Romania also recording double-digit falls.
Compared with January 2009, retail sales fell 1.3% in the euro zone and 1.6% in the wider European Union.
High unemployment rates across the euro zone, likely muted wage growth over the coming months and the ending of car scrappage schemes will likely limit the upside for consumer spending, analysts said.
Meanwhile, German retail sales were stable in January compared with the previous month, figures released today by the national statistics office said.
Retail sales fell by 3.4% from January 2009, the Destatis office added.
The latest survey of consumer confidence by the GfK research institute has shown that Germans have added concern over the Greek debt crisis to worries about unemployment, with the poll falling in March for the fifth month in a row.
