Italian Retail Sales Slump in August

In Italy, the Retail sales report provides an aggregated measure of sales of retail goods and services over a specific time period. Retail sales are seasonal, volatile and relatively important to the overall economy. Economists had expected a much more positive 0.4 per cent rise in the month, and a return to a year on year rise.
The revised estimates recently published by the Italian National Statistics Office (ISTAT) confirmed that the economy stagnated again as far as 2016 is concern.
Retail sales declined a seasonally adjusted 0.1 percent month-over-month in August, following a 0.2 percent drop in July. Although there has been forecast that there will be rise of about 0.4 percent and a return to a year on year rise.
This result marks the second consecutive month of disappointment, after sales were also lower than expected in July.
The decline in August has been highlighted to be caused by a 0.8 percent depreciation in sales of food products as well as sales of non-food products appreciating by 0.3 percent. Food sales declined by 0.7% over the year and non-food sales declined 0.5% over the year.
Overall retail sales are still around 5% lower than the levels seen in 2010 with a slight decline in food sales, while non-food sales are still over 7% lower than 2010 levels.
Italy’s economic recovery was already stalling in the first half of the year, and businesses are now facing additional uncertainty as the country approaches a key referendum on constitutional reform.
The longer weakness in the gross domestic product (GDP) development of Italy has had a significant influence in the activation of organizational depreciation despite the very accommodative monetary policy and a very sharp depreciation in long-term interest rates from crisis levels.
The lack of confidence within the consumer sector will also tend to make it more difficult for the government to secure referendum approval for constitutional reform with the electorate taking an anti-establishment stance.
Italian shoppers’ pessimism contrasts with their neighbors’ in France, where consumer confidence has returned to a recent nine-year high.