Bloomberg PMI Indicates September Decline In European Retail

Bloomberg PMI Indicates September Decline In European Retail

Retailers Cite Low Consumer Confidence, Oil Price Concerns

NEW YORK, Oct. 6 /PRNewswire/ -- The September 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, indicates that month-on-month sales at Eurozone retailers declined in September. While only a marginal fall to 49.7, the figures signal an end to the short-lived recovery of demand in the sector.

The seasonally adjusted Bloomberg Eurozone Retail PMI fell below the no-change mark of 50.0 in September, only a month after reaching a survey high. Retailers reported reduced average consumer spending and a perceived lack of consumer confidence in the wider economy, exacerbated by concerns over oil prices. Sales were further hampered by retailers continued reliance on aggressive promotional activity to bring in shoppers.

A sharp fall in German retail sales compared to last month (45.2) more than offset higher sales in the French and Italian retail sectors. Reversing the trend from last month and rising for the first time in over a year, Italian retail sales (54.4) bolstered the region. French retail sales (51.1) remained stable and above the no-change mark for the fifth month in a row.

Sales Against Targets

The latest survey data signaled that retailers across the Eurozone failed to achieve their original sales plans in September (39.5). Retailers reported that consumers had become increasingly cautious in their spending, as the wider economic outlook remained uncertain. Across the Eurozone, retailers were also pessimistic regarding next month's targets (48.8).

Retailers' Stocks

The value of purchases made by retailers in the Eurozone fell in September (49.1), as firms failed to meet sales targets and sold from existing stocks. As a result, inventories of goods for resale fell for the second month running (48.9). In Italy, however, the latest fall in inventories was attributed to the unexpected growth in sales during the month.

Margins and Prices

In order to minimize the decline in sales, many Eurozone retailers were forced to extend promotional activity into September. Promotions were a key factor behind the latest sharp fall in profit margins (41.6), which was exacerbated by an acceleration in purchase price inflation during the month. On average, purchase prices rose at their sharpest rate for five months in September (54.2).

Employment

Retailers in the Eurozone expanded their workforces for the third successive month in September (50.2), as premises were extended and sales drives intensified to generate sales. The overall rise in retail sector employment was reflected in all three of the principal Eurozone economies during the month, which registered broadly similar rates of marginal growth.

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Notes to editors

The Bloomberg Eurozone 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 exclusively for Bloomberg 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 BST, followed by a general press release and analysis on Bloomberg Television. October and November data will be released on the following dates:

* October Data Released 7 November 2005

* November Data Released 6 December 2005

Source: Bloomberg

CONTACT: Judith Czelusniak of Bloomberg LP, +1-212-617-4273, bloomberg@bloomberg.net; or Jeffrey Weir of Sloane & Company, +1-212-446-1878, jweir@sloanepr.com

Web site: http://www.bloomberg.com/

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