Italy’s retail sales fall to two-and-a-half-year low in June

Retail sales in Italy recorded the sharpest monthly fall in over two-and-a-half years in June, revealing the retailers’ worst sales performance since December 2012, with data highlighting concurrent downturns in gross margins, spending on goods for resale and employment.

The headline seasonally adjusted Markit Italy Retail PMI which tracks month-on-month changes  in retail sales, dropped to 40.2 in June, from May’s 45.2. This signaled a sharp acceleration in the rate of decline in retail sales, to the fastest seen since November 2013. Bad weather, lower footfall and uncertainty among consumers all contributed to the latest drop in sales, panel member reports showed.

For the majority of retailers, actual sales in June were below previously set plans. With only 5 percent of firms able to surpass their targets, this equated to the greatest degree of underperformance across the sector as a whole since December 2012, and one that was among the most marked over the entire series history, Markit reported in its latest research note.

"The retail PMI nose-dived in June, signaling underlying weakness in consumer spending. In fact, there’s been a significant shift in momentum seen since late last year, with the survey’s measures of sales, employment, margins, and retailers’ buying levels all on a downward trajectory," said Phil Smith, Economist, Markit.

Stocks held by retailers increased again during June, continuing a trend seen since February. Furthermore, having accelerated from the already solid pace recorded in May, the rate of accumulation was the fastest for over five years.

Meanwhile, inventories rose, despite retailers recording a further reduction in their spending on goods for resale, the eighth in as many months. The extent to which buying levels decreased was the most marked since August 2014, the report added.