PARIS (MNI) – French retail sales bounced back 4.3% in real,
seasonally-adjusted terms in June, but were still 0.3% lower on the
year, the Bank of France estimated Friday on the basis of its monthly
business survey.
Food sales alone were up 4.5% in June, while turnover in
manufactured goods rose 4.7%.
Weak sales in previous months left 2Q results down 1.0% on the
quarter. Declines were led by clothing, sporting goods and jewelry. Only
new cars and audio-visual equipment posted significant gains.
The 2Q results are worrisome, given the traditional role of private
consumption as the main driver of the French economy. Fundamentals are
not promising for consumer spending, since underlying wage trends are
barely keeping up with inflation and looming tax hikes will take a
bigger bite out of family budgets.
Private consumption grew by 0.2% in 1Q, but the gain was due mainly
to elevated heating costs, which obliged households to cut back outlays
on manufactured goods. Average spending on goods for April and May was
down 0.2% from 1Q.
Insee expects consumption to contract slightly in 2Q and recover
only marginally in the second half, as households draw down savings
further. The average full-year gain would be 0.2%, as in 2011.
–Paris bureau, +331 4271 5540; Email: ssandelius@marketnews.com
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