Italy’s retail sector registered a disappointing end to 2017, with sales down on both monthly and annual measures despite ongoing promotional discounting.
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This led to another marked deterioration of margins, whilst expectations for January were also subdued.
Nonetheless, retailers still increased their purchasing activity at a notable rate which led to another marked increase in stocks of goods for resale.
Staffing levels also rose in December, albeit slightly.
The IHS Markit Italy Retail PMI – which measures changes in like-for-like sales on a month-on-month basis – recorded a level of 49.5 during December.
That was up from 49.2 in the previous survey period and marked a second consecutive marginal monthly decline in retail sales.
Compared to a year ago, sales were also down.
Here the degree of contraction was more notable, with the rate of decline close to November’s fourmonth record.
Panellists reported that footfall was generally lower, and that consumer purchasing power remained under strain at the end of 2017.
There were a number of reports from the survey panel that sales growth had failed to materialise at a time of considerable promotional activity and discounting.
IHS Markit Italy Retail PMI With reports also of strong market competition, ongoing discounting meant the margins of Italian retailers remained under pressure during December.
Latest data showed that gross margins deteriorated at a marked and accelerated pace during the month.
Sales came in well below expectations during December.
Nearly a third of the survey panel reported a miss in sales relative to target during the month, and a notable proportion of companies are anticipating that like-for-like sales will be lower than previous set plans in January.
Retailers linked their pessimism to worries over the recent negative trends in demand and fears that consumers will remain cautious in the early part of 2018.
Despite signalling pessimism over January sales, retailers in Italy continued to raise their purchasing of goods for resale.
December data showed that growth was the best in the survey history, and the third month in succession that an increase has been registered.
Solid growth of purchasing activity meant that inventories of goods for resale also continued to build during the month.
The rate of growth was again strong, easing only slightly on November’s record. ■