France’s retail sales rise marginally in May

France’s seasonally adjusted Retail PMI rose to 50.6 in May from April’s 48.2. This suggests a slight rise in the pace of growth. According to panellists, the higher sales are because of successful marketing campaigns. In May, retailers in France recorded a growth in sales in sequential terms. This was the first increase since October 2015. However, on a year-on-year basis, sales declined at the sharpest rate in three months. However, retailers project sales to surpass targets in June.

According to retailers, the factors that will help stimulate sales in the next three months include, good weather, product launches, changes in government policy, promotions, advertising campaigns, tourism and the European football championships. On the other hand, the factors that will result in sales to decline in the next three months include higher taxes, strikes, weak economic conditions, store renovations, a challenging social climate, security concerns and solid competitive pressures.

Stocks of goods that are held by French retailers for resale declined further in May. This was the second decline in several months, with the pace of fall accelerating to the fastest since February 2014, said Markit. Moreover, the value of goods ordered for resale by retailers in France fell in May, the tenth decline in several months. However, the pace of decline was modest overall and slowest since January.

Retailers in France have hinted at an additional rise in their average purchasing costs in May. The latest data shows that the retailers’ margins continue to be under pressure amidst robust competitive pressures. The pace of declined decelerated to the slowest in the three months. Meanwhile, staffing at French retailers dropped for the fifth continuous time in May; however, the pace of job shedding continued to be marginal, noted Markit.