Bloomberg Retail PMI Slips to 48.3 in October, Third Successive Monthly Decline
The Bloomberg Retail Purchasing Managers' Index (PMI), a monthly survey indicating economic conditions in the Eurozone retail sector one month ahead of government figures, showed a third successive monthly decline in sales value figures in October.
At 48.3, down slightly from 48.8 in September, the rate of decline remained modest, but was the fastest since May.[1]
- France experienced the steepest decline in sales values compared with September (48.5 in September to 47.2 in October). The drop represents sales falling at the fastest pace since the survey started at the beginning of the year.
- Sales in Italy also fell, although the rate of decline eased slightly. (46.6 in September to 47.7 in October.)
- In Germany, sales fell for the first time in four months (49.7 in October), although the fall was only marginal and the weakest of the three countries surveyed.
In addition to a further decline in month-on-month sales, the Bloomberg Retail PMI shows a decline in like-for-like Eurozone retail sales compared to a year earlier for the sixth month running in October, (40.4 down from 43.7 the previous month).
The annual rate of contraction in sales was the fastest since May, reflecting increased rates of decline in Germany and France. In contrast, the annual rate of decline eased slightly in Italy. Retailers generally attributed the falling value of sales to the poor economic environment, declining consumer purchasing power and unseasonably mild weather allowing purchases of certain winter goods to be postponed.
Retailers also indicated October's sales performance was again well below target. Actual sales out-turns were below plans in all five broad product sectors monitored, with the most severe shortfall recorded in Food & Drink. Measured overall, Eurozone retailers also expected sales to fall short of plans in November. Only in Italy were retailers optimistic that their sales targets would be achieved next month.
Other results include:
- A further decline in the value of goods ordered for resale by Eurozone retailers, reflecting widespread expectations of fewer sales in November. However, the rate of decline in purchasing activity eased for the second successive month to the slowest since June.
- Average purchase prices paid by Eurozone retailers continued to rise at a steep rate in October, as higher input costs at suppliers (the result of soaring oil prices and international shortages of metals) were passed down the supply chain. The rate of purchase price inflation eased marginally for the fourth month running to the least marked since January.
- Higher purchase prices continued to squeeze profit margins, which fell sharply for the 10th month running in October. Price discounting in the face of weak sales and strong competition was also reported to have hit margins.
- October figures show employment in the Eurozone retail sector remains on a downward trend, with the decline in employment broadly similar to that recorded a month ago. In general, retailers reported they had reduced staffing levels in line with lower turnover (primarily through the non-replacement of leavers).
The Bloomberg Retail PMI is the first monthly report of its kind in Europe, providing businesses, governments, central banks, economists and analysts the most accurate and up to date insights and data into the Eurozone retail sector.
The index, compiled by NTC Research Ltd, questions more than 1,000 retail executives in Germany, France and Italy. These countries together represent approximately 75% of total Eurozone retail sales. National data are weighted together according to each country's contribution to total Eurozone retail sales to form the Bloomberg Eurozone Retail PMI.
The survey tracks changes in retail sales, performance against sales targets, inventories, prices, employment and other key indicators. Data are published approximately one month ahead of government figures.
The Bloomberg Retail PMI report is first published exclusively for Bloomberg users on the BLOOMBERG terminal at 09:00 GMT, followed by a general press release and analysis on Bloomberg Television. November and December data will be released on the following days:
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