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Sales continue to rise in French retail sector

Staff Writer | February 7, 2018
The latest survey data highlighted a largely positive month for the French retail sector in January.
French company
France   IHS Markit France Retail PMI
Likefor-like sales increased for the tenth consecutive month, in turn boosting employment and purchasing activity.

Meanwhile, gross margins were unchanged after having declined in the prior 12 months.

On the other hand, the rate of growth in like-for-like sales hit a five-month low and sales remained down on an annual basis.

The seasonally adjusted headline Retail PMI posted 51.0 in January to highlight a tenth consecutive rise in like-for-like sales, the longest sequence of expansion since 2006/2007.

That said, down from 53.0 in December, the index signalled a rate of growth that was the weakest since August last year.

Bucking the upward monthly trend, sales were down on an annual basis for the fourth time in as many months.

Moreover, the rate of decline was the most marked for 15 months and far sharper than the long-run series average.

Actual sales were below previously-set plans for the sixth successive month during January.

Furthermore, the extent of the shortfall was the most marked since last August.

This dampened firms’ outlook, with retailers (on average) taking a neutral stance towards their sales over the coming month.

This followed a sequence of optimism in every month since February 2017.

Factors expected by survey respondents to boost sales over the coming months included: consumer confidence, higher customer purchasing power, lower taxes and social contributions, and favourable weather conditions.

Those factors reported by panel members as likely to depress sales over the next three months included: increased interest rates, high taxes, poor weather conditions, strikes, terrorist attacks and lower customer purchasing power.

After having been squeezed in each of the previous 12 survey periods, gross margins were unchanged during the opening month of the year.

French retailers registered a fortieth consecutive rise in average input prices during January amid reports of higher supplier costs.

The rate of inflation eased for the third time in as many months, but it remained sharper than the series average nonetheless.