Euro zone retail sales returned to growth in July although increased by less than expected on a monthly basis, data showed today, as consumers filled their cars more with cheaper fuel. The European Union's statistics office Eurostat said retail sales in the 19 countries sharing the euro rose 0.4% during July for a 2.7% year-on-year increase. Economists polled by Reuters had expected a 0.6% monthly rise and a 2% annual increase. Although lower than expected, the July expansion followed a 0.2% decline of retail sales in June on a monthly basis, albeit that revised from an initial -0.6% reading. The increase in sales came after a sharp improvement of sentiment in the retail sector in July but against declining consumer confidence, as measured by the European Commission's monthly economic sentiment survey. A 0.8% monthly increase in the volume of fuel had the biggest upward impact on the headline number. Sales of food, drinks and tobacco also grew 0.2%. Retail sales in the euro zone's biggest economy Germany rose 1.4% month-on-month in July and were 0.2% lower in the second biggest France. In the 28 countries of the European Union, sales grew in July 0.3% month-on-month and 3.3% from a year earlier.

Source