Swiss retail sales extend decline in June, falls deeper than expected

Swiss retail sales continued to decline in the month of June, with the decline staying wider than what the markets had expected.

Retail sales declined by real 3.9 percent year-on-year in June, faster than the 1.7 percent decrease seen in May, data released by the Federal Statistical Office showed Tuesday. It was also bigger than the expected fall of 2 percent. Sales have been falling since August 2015. On a monthly basis, retail trade turnover registered a 0.5 percent decline in June.

Excluding service stations, retail sales decreased 0.5 percent from May. Sales of food, drinks and tobacco slid 0.7 percent and non-food sales decreased 0.6 percent. There was a decline in food sales of 1.5 percent in nominal with a 1.7 percent real terms decline. There was also a sharp decline of 6.8 percent for non-food sales with a 5.1 percent decline in real terms, as the rate of decline in prices accelerated.

Moreover, in nominal terms, overall retail turnover dropped 4.6 percent in June from previous year. The decline has been ongoing since January 2015 and this was the largest decline since January 2003, the statistical office said. Further, month-on-month, retail turnover fell 3.9 percent in June.

Meanwhile, there will be further speculation that franc strength is undermining domestic sales with consumers looking to buy durable and large-ticket items in neighboring countries given substantial cost differences.