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Retail

Euro Zone Consumers Cut Food Spending As Inflation Bites: Eurostat

By Dayeeta Das
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Euro Zone Consumers Cut Food Spending As Inflation Bites: Eurostat

Euro zone consumers cut spending on food, drinks and tobacco for the second straight month in May amid a spike of prices, according to latest estimates from the European Union statistics office Eurostat.

The drop in essential purchases came as total retail sales in the 19-country currency bloc slightly rose in May on the month, but below market expectations.

Eurostat said consumers' purchases increased by 0.2% in May month-on-month after they had tumbled by 1.4% in April.

Economists polled by Reuters had expected a 0.4% rise on the month.

Compared to last year, retail sales also grew in May by 0.2%, Eurostat said, beating market expectations of a 0.4% fall.

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Consumer Trends

Despite the marginal overall increase in retail spending, sales of food, drinks and tobacco dropped on the month by 0.3%, compounding the 2.3% slump recorded in April, which was the worst fall since June 2020 when euro zone nations started to timidly reopen their economies after COVID-19 lockdowns.

However, Eurostat revised slightly upwards its preliminary estimate of the fall in April retail sales, which it initially had reckoned to be of 2.6%.

On the year, sales of food, drinks and tobacco fell by 3.6% in May, matching the fall recorded a month earlier, in line with the downwards trend which began in December.

Read More: France To Step Up Food Sector Price Probes To Curb Inflation

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Inflation

The drop in purchases of essential goods coincided with the record spike in prices, with headline inflation at 8.1% in May, and estimated to have grown to 8.6% in June.

Prices of food, alcohol and tobacco are estimated by Eurostat to have risen 7.5% in May on the year, and 8.9% last month.

Euro zone consumers also cut their spending on fuel and on online shopping by 0.2% on the month in both cases.

The overall rise in retail sales was due to a 1.2% increase in non-food products, a vast category including clothing, medicines and cosmetics.

News by Reuters, edited by ESM – your source for the latest retail news. Click subscribe to sign up to ESM: European Supermarket Magazine.

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