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April Eurozone Retail Sales Rose to New High, Says Bloomberg PMI

NEW YORK, May 8 /PRNewswire/ -- The April Bloomberg Eurozone Retail Purchasing Managers' Index ("PMI(R)"), a monthly survey indicating economic conditions in the Eurozone retail sector one month ahead of government issued figures, indicated that Eurozone retail sales rose solidly at the start of the second quarter.

The seasonally adjusted Eurozone Retail PMI rose sharply in April to a level above the no-change mark of 50.0. This followed three months of sub-50 readings, which signal falling month-on-month retail sales. Moreover, the PMI registered a new survey high of 54.6, indicating the sharpest growth of retail sales since survey data were first available in January 2004. Where retailers reported higher sales volumes compared to last month, they often commented that a general improvement in market demand in the Eurozone economy had served to strengthen consumer confidence and boost turnover. Higher retail sales volumes were also driven by successful promotional campaigns, although the cost of these also tended to create downward pressure on margins (which continued to fall sharply).

The German and French retail sectors were the main sources of higher retail sales in April. Having fallen slightly in March, monthly retail sales in Germany increased at a marked pace, which was by far the sharpest indicated by the survey to date (59.3). Sales also rose strongly at French retailers (55.2), having declined slightly last month. In Italy, retailers reported that the general election had depressed consumer activity, and Italian retail sales declined sharply since March (46.8).

Eurozone retail sales were higher in April compared to a year earlier, the first annual growth in sales since April 2004 (52.1). However, this growth was reported by panellists to be largely a consequence of the earlier Easter period in 2005. Annual sales increased in Germany and France in April, but continued to fall in Italy.

Sales Against Targets

Although retail sales volumes increased on both an annual and a monthly basis in April, retailers continued to fall short of original targets (41.0). The shortfall in sales during the month remained substantial, though it was less marked than the survey's historical average. Retailers were strongly confident of meeting their May sales targets (60.5), and expanded purchasing activity as a result.

Retailers' Stocks

Retailers in the Eurozone expanded their volumes of purchases in April to support rising sales demand (55.7). The overall level of goods ordered for resale increased for the second successive month, and at a sharper rate than in March. Moreover, retailers anticipated sales turnover to continue to expand in the coming months, and increased their stock levels to cater for extra demand. The rate of growth of inventories of goods for resale was the fastest indicated by the survey to date (56.7).

Margins and Prices

Average purchase prices in the Eurozone retail sector increased markedly in April -- at the fastest rate since June 2004 (58.4). Increased wholesale rates were often linked by retailers to high oil and petrol prices, while wider demand for inputs also pushed up raw material prices. Increased cost burdens combined with ongoing promotions led to a further sharp fall in Eurozone retailers' gross margins in April (44.8).


Survey data pointed to an overall expansion of the Eurozone retail sector workforce in April, following six months of contraction (50.5). Firms hired staff as a result of increased sales activity during the month although, in many cases, new recruits were only hired as temporary staff. The overall rate of job creation was only marginal, and growth was confined to Germany.