Italian retail sectors continue to suffer in July, Markit data reveal
The Italian retail sector suffered from a further reduction in activity in July, with sales down markedly both on the month and compared with levels one year ago, according to data published today by Markit.
“The downturn in Italy’s retail sector extended to a seventeenth month in July. Furthermore, the rate of contraction in like-for-like sales accelerated from the previous month and was marked,” Markit said.
Anecdotal evidence suggested that low consumer confidence continued to weigh on spending, with footfall reportedly falling over the month.
During the month, the rates of decline in employment, purchasing activity and inventories all accelerated, while profitability continued to deteriorate sharply.
Cost pressures eased to the weakest in 20 months amid stronger competition between suppliers. July’s sales levels were also down sharply on those registered 12 months’ previously.
Markit pointed out that the annual rate of contraction slowed further from May’s survey record, but was still substantial and Italian retailers generally fell short of their targets set for July.
Sentiment in the sector has been negative in seven of the past eight months.
“Italian high street businesses registered yet another tough month’s trading in July. Like-for-like sales fell at a considerable pace despite widespread offers of discounts, with both factors contributing to a further sharp reduction in gross margins. Retailers meanwhile stepped up efforts to reduce stock levels by slashing purchasing activity,” said Phil Smith, economist at Markit and author of the research.