Bloomberg Euro-Zone PMI Signals Further Sales Decline in July

Easing in Rate of Decline in Germany Contrasts with Steeper Downturns in
France and Italy.

NEW YORK, July 30 /PRNewswire/ -- The Bloomberg Euro-Zone Retail Purchasing
Managers' Index ("PMI((R))"), based on a mid-month survey of more than 1,000
executives in the euro area retail sector that provides data one month ahead
of government-issued figures, fell from 47.5 in June to 47.3 in July. By
dropping further below the no-change level of 50.0, the seasonally adjusted
index pointed to a sharper rate of decline in like-for-like sales, which have
now fallen for fourteen successive months. The rate of contraction in July was
also faster than the average during Q2, but has eased since Q1 and the
survey-record pace seen last November.

The fractional movement in the Euro-Zone index greater changes in the three
largest euro countries:
-- Germany experienced an easing in the rate of decline that registered
as
only a marginal drop in month-on-month sales. The index rose from 46.0
in June to 49.8, signaling the slowest rate of contraction since sales
began falling in June of last year. It was also the weakest decline
among the three countries in July (Germany had posted the fastest
contraction one month previously).
-- France posted an acceleration in the rate of sales decline,
registering
the steepest monthly fall since March and a pace of contraction
greater
than the average seen over the first half of the year. The decline was
the fourth-largest recorded over the survey's five-and-half year
history. The index fell from 49.4 to 46.0.

-- Italy saw sales fall at the fastest pace since March, and registered
the
steepest month-on-month sales deterioration of the three largest euro
economies. Its index slipped from 47.0 to 45.6. Unlike France, Italy
remained above the average recorded over the first half of the year.

The continued month-on-month decline in retail sales contributed to a sharper
annual rate of contraction in July. The year-on-year decrease remained less
severe than the trends seen in Q4 and Q1. The year-on-year sales index fell
from 42.7 in June to 39.8. A moderation in the annual rate of decline in
Germany was offset by steeper falls in both France and Italy, with the latter
continuing to see the fastest pace of contraction of the three countries. This
has been the case since the start of last year.

Sales by sector - rates of contraction accelerate for all product areas except
autos

In July, retail sales were lower than levels recorded one year earlier for all
main product sectors. Greater declines were seen in all cases except autos.
Here, the rate of contraction remained less marked than what was noted during
the second-half of last year, attributable to car scrappage incentives. Food &
drink continued to see the weakest rate of sales decline of the five main
product sectors, followed by pharmaceuticals. Clothing & footwear and
household goods suffered the sharpest declines respectively.

Sales against plans - targets missed in all three countries and for all
product sectors

The sales-against-targets index fell from 36.6 in June to 35.8, registering a
further shortfall of actual sales against original plans. Sales were again
below targets in all three countries in July, led by France, where retailers
reported the second-worst performance in the history of the survey for that
country. German retailers reported the smallest shortfall of the three
countries in July. By product sector, targets were missed to the greatest
extent in clothing & footwear, while food & drink retailers were the least
disappointed.

Expected sales next month - expectations at six-month low

In July, confidence among retailers about the month ahead worsened across the
Euro-Zone. The index of expected sales dropped for the fourth consecutive
month to hit a six-month low of 44.7 compared to 49.8 in June. The number of
retailers expecting to miss targets in July exceeded those that anticipate
targets to be beaten in all three countries, with Italian retailers the most
pessimistic overall. Negative sentiment eased in Germany, but worsened in
France.

Prices and margins - inflationary pressures remain subdued

The prices paid index rose from June's record low of 50.0 to 50.7 in July.
Nevertheless, the index registered the second-weakest rate of increase in the
survey history. Weak demand was reported to have led to some price discounting
by wholesalers, most notably for food & drink where prices fell for the third
month running. Marginal increases in wholesale prices were registered across
all three countries, with French retailers seeing a negligible rise.
Retailers' margins deteriorated in the face of weak demand, with the
seasonally adjusted index dipping from 42.1 to 41.6. Italy reported the
sharpest fall in retail margins.

Employment - cost pressures result in further job shedding

Retail employment in the Euro-Zone was cut for the sixteenth successive month
in July. The rate of job losses gathered pace as retailers reported increased
pressure to cut costs in the face of weak demand and diminished margins. The
Employment Index sank from 48.1 to 47.4. A stabilization of the German retail
workforce (50.1) was countered by further declines in France and Italy, with
the latter seeing the steeper rate of contraction (45.4).

Retail stocks - survey-record fall in inventories

The survey highlighted a record rate of decline of inventories of unsold goods
in July (42.1), reflecting deliberate moves by retailers to cut stock through
discounting and reduced wholesale purchases (43.8). French retailers led the
decline, though lower stock levels were also seen in Germany and Italy. The
need to cut stock was most commonly linked to concerns over weak demand.

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Notes to editors

The Bloomberg Retail PMI report is first published exclusively for Bloomberg
users via the BLOOMBERG PROFESSIONAL((R)) service at 09:00 GMT, followed by a
general press release and analysis on BLOOMBERG TELEVISION.

Data are published on the penultimate working day of each month. Forthcoming
data will be released on the following dates:
August data: Released 27 August 2009
September data: Released 29 September 2009

SOURCE Bloomberg

Kristin Swenson, Bloomberg LP, +1-212-617-4264, kswenson@bloomberg.net