August Sees Steeper Decline in Italian Retail Sales
High street spending in Italy fell sharply on the month in August, and was also down considerably on levels seen one year ago. In line with lower sales and a corresponding decline in profitability, retailers continued to reduce both employment and spending on items for resale.
The average price of purchases meanwhile increased at a slightly faster rate, albeit one that was still down on the series average. August saw the seasonally adjusted Italian Retail PMI drop to a three-month low of 37.1, from 40.7 in July, signalling a sharp and accelerated contraction in retail sales. The decrease was the
eighteenth in successive months, and largely attributed by survey respondents to lower footfall.
Measured relative to the situation one year previously, Italian retail turnover was down sharply in August. The primary reasons provided by panel members for the decrease in sales over the past 12 months were lower consumer purchasing power and an associated drop in consumption. That said, the overall annual rate of decline was the weakest since last November.
The majority of retailers missed their sales targets in August, which anecdotal evidence partly linked to
weaker-than-expected seasonal activity. However, the degree of underperformance across the sector as whole decreased considerably, with the difference between actual and planned sales the smallest for 12 months.
Retailers’ confidence improved significantly from July’s series low during August, though firms in general still remained pessimistic with regards to the prospects of achieving September sales targets.
After easing in July to the slowest for 20 months, wholesale cost inflation accelerated slightly during the latest survey period to the fastest since May. Firms reported that higher costs for petrol and raw materials were behind the rise in average purchase pri