Eurozone Retail Books a Wintry End to 2023 as Sales Slip

Total retail trade was 1.1% lower in December than a month earlier, figures from European Union statistics agency Eurostat showed Tuesday. This was a little worse than the 0.8% fall expected by economists, according to a poll compiled by The Wall Street Journal ahead of the release. Sales did however rise slightly in November, according to revised figures that reverse previous estimates for a decline.

The downturn in retail comes despite easing inflation, suggesting shoppers are still wary of spending amid an enduring cost-of-living crisis that weighed on household outlay throughout last year. For 2023 as a whole, retail trade was 1.8% lower than the previous year.

Germany, the eurozone’s most important economy, booked a particularly sharp slowdown in retail in December at a 1.6% decline, while other major members including France, Spain and the Netherlands also registered falling sales.

The eurozone’s bleak retail landscape contrasts with a sunnier outlook for the U.S. sector. Sales there increased at the end of last year, furthering hopes that consumers can drive economic growth in 2024, adding to more than 3% growth in the year’s final quarter.

By contrast, the euro area only just avoided a recession in the last quarter of the year, according to preliminary figures set out last week. Activity stagnated after a slight contraction over the previous three months, with weak consumption adding to faltering industrial production. Hopes remain that the bloc’s economy can gradually recover in the new year, amid slowing inflation and expectations that European Central Bank will cut interest rates.

Consumer prices rose by 2.9% in the bloc in December, a slight acceleration, though the rate eased again in January. Nevertheless, price rises remain above the European Central Bank’s 2% target, with the core rate that strips out more volatile elements running above the headline figure.

Write to Joshua Kirby at [email protected]; @joshualeokirby