Europe News

Euro zone retail sales stall as households feel pain


Retail sales across the 18 countries that share the euro were flat in May, missing expectations as consumers continue to rein in spending amid high unemployment.

The European Union's statistics agency, Eurostat released the figures as members of the European Central Bank's governing council are gathered in Frankfurt where no new stimulus measures are expected after the bank cut interest rates to record lows last month.

Eurostat said the month-on-month volume of sales was stable in May compared to a 0.2 percent decrease in retail sales in April.

Read MoreEuro zone jobless at record high as retail sales surge

Krisztian Bocsi | Bloomberg | Getty Images

The agency said May saw a 0.3 percent rise for the non-food sector while fuel remained unchanged and sales in food, drinks and tobacco slipped 0.3 percent.

Annually, retail sales are 0.7 percent higher compared to the same time this year, largely driven by the 1 percent and 0.8 percent gains seen in non-food items and fuel respectively.

"It now looks most likely that euro zone retail sales volumes eked out only slight growth in the second quarter, which adds to the impression that the euro zone is finding it hard to build appreciable growth momentum," said chief U.K. and European economist at IHS Global Insight, Howard Archer.

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"Flat retail sales in May, coupled with a modest dip in euro zone consumer confidence in June from May's 79-month high, reinforces suspicion that any improvement in euro zone consumer spending is more likely to be gradual than pronounced over the coming months - especially as there are still significant constraints on consumers in several countries," said Archer.

Euro zone unemployment was stable at 11.6 percent for the second consecutive month in May, down slightly from the 12 percent seen a year ago, according to Eurostat data released on Monday.

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