Eurozone consumers cut food spending amid rising inflation

Eurozone consumers cut spending on food, drinks and tobacco for the second month in a row in May due to rising prices, according to estimates from the European Union’s statistics agency Eurostat, released on Wednesday.

Despite a drop in essential purchases, total retail sales in the 19-country currency bloc increased slightly in May of the month, but below market expectations.

Eurostat said retail sales rose 0.2% in May from a month earlier, after falling 1.4% in April.

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

Compared to the same period last year, retail sales also grew by 0.2% in May, Eurostat said, beating market expectations for a 0.4% drop.

Despite the marginal increase in retail spending, food, beverage and tobacco sales fell 0.3% on the month, extending the 2.3% drop recorded in April, which was the worst drop since June 2020, when countries Eurozone countries have started to reopen their economies after the lockdowns against Covid-19.

However, Eurostat slightly revised up its preliminary estimate of a decline in retail sales in April, which initially estimated at 2.6%.

For the year, sales of food, beverages and tobacco dropped 3.6% in May, matching the decline recorded a month earlier, in line with the downward trend that began in December.

The drop in purchases of essential goods coincided with a record spike in prices, with inflation of 8.1% in May and an estimated 8.6% in June.

Source: CNN Brasil

You may also like