European retail sales falling

The euro zone retail sales were much weaker than expected in March and the decline is the most notable since 1995 as soaring fuel and food costs have affected consumer spending considerably.

Retail sales are seen as a direct indication of consumer demand and across the 15 countries using the euro sales fell 0.4 percent month-on-month.

This has resulted in an annual decline of 1.6 percent as published by the European Union statistics office. However, analysts polled by Reuters indicates a 0.2 percent monthly rise and a 0.6 percent fall year-on-year.

Crude oil prices have doubled in the past 12 months, as well as higher food prices such as wheat and rice, the cost of living is substantially higher which has caused a huge blow in consumer confidence.

Chief Executive Officer Anders Dahlvig of Ikea, the largest home-furnishing company, has said that they are cutting bank their expansion plans as a result of both slower economic growth and the current high prices.

Retailers are facing many problems, and as Jose Luis Duran the chairman of Carrefour who are the world’s second- biggest retailer has reiterated, inflation seems to be the biggest issue as costs are growing faster than any retail price increases.

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