Euro zone retail sales dip as auto fuel purchases fall in July

Retail sales in the euro zone declined in July, though only due to reduced automotive fuel purchases, while June registered an increase rather than the decline reported last month, data showed on Wednesday.

Retail sales volumes in the 20 nations sharing the euro currency fell by 0.2% in July from June and were 1.0% lower year-on-year.

That compared with average forecasts in a Reuters poll of economists of a 0.1% monthly decline and a 1.2% drop from a year earlier.

At the same time, June figures were revised up to a 0.2% month-on-month increase and a 1.0% year-on-year decline, compared with negatives of respectively 0.3% and 1.4% reported last month.

Consumption has been sluggish as real incomes fall and households are now spending a larger part of their incomes on expensive energy and on credit and mortgage repayments, eroding demand for other goods.

Households have also increased their savings because of higher rates and as a precaution at a time of low economic growth.

Year-on-year, retail sales have fallen for 10 consecutive months.

However, sales of food, drink and tobacco did increase by 0.4% month-on-month in July and of non-food products by 0.5%, with a 3.8% rise for online sales. Automotive fuel sales fell by 1.2%.