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Retail sales in the eurozone fell at their steepest monthly rate in nearly two years in May, as growing uncertainty over US trade tariffs weighed on consumer sentiment and curbed spending.
According to first estimates released by Eurostat on Monday, the seasonally adjusted volume of retail trade decreased by 0.7% in the eurozone and by 0.8% across the EU in May, compared to April.
The decline aligns with economists’ forecasts but marks the sharpest drop since August 2023.
The setback follows a modest rebound in April, when sales rose by 0.3% in the eurozone and by 0.8% in the wider European Union.
On an annual basis, eurozone retail sales growth slowed from 2.7% in April to just 1.8% in May — the weakest expansion since July 2024.
Sector breakdown and national trends
Across the eurozone, all major retail sectors experienced contraction. Sales of food, drinks and tobacco fell by 0.7%, while non-food products — excluding automotive fuel — declined by 0.6%.
Automotive fuel sales dropped the most, falling by 1.3% in specialised stores.
In the broader EU, the declines were similarly spread, with food and beverage sales down 0.8%, non-food products dropping by 0.7%, and automotive fuel dipping 1.2%.
Among EU member states, the most severe monthly contractions were seen in Sweden (-4.6%), Belgium (-2.5%) and Estonia (-2.2%). Meanwhile, Portugal (+2.1%), Bulgaria (+2.0%) and Cyprus (+1.0%) posted the strongest increases.
Markets stay cautious as investors watch US trade moves
European equity markets remained largely flat on Monday.
The blue-chip Euro STOXX 50 hovered near 5,300 points, while the broader STOXX 600 was unchanged at 541, as investors awaited clarity on the direction of US trade policy.
The euro edged down 0.3% to $1.1730, while yields on 10-year German Bunds held steady at around 2.57%.
President Donald Trump is expected to issue a new wave of tariff warning letters later on Monday, targeting countries with trade surpluses with the United States.
While the list of recipients remains undisclosed, Commerce Secretary Howard Lutnick confirmed that the “Liberation Day” tariff package originally scheduled for 9 July would now take effect on 1 August.
Trump’s administration had previously imposed a 20% import tax on EU-manufactured goods in April, but quickly reduced the rate to 10% as financial markets plummeted.
However, a separate deadline to reach an agreement with the European Union before tariffs rise as high as 50% has now been set for Wednesday.
So far, only China, the United Kingdom and Vietnam have managed to secure temporary exemptions through deals with Washington.
Trump has warned that any country aligning with the ‘anti-American policies’ of the BRICS bloc will face an additional 10% tariff — with no exceptions.
