Retail trade in the euro area has dropped 1.6 % in December compared to the month before. The Belgian drop was even higher, with - 1.9 %: it seems the holiday bonuses went straight into the bank accounts.
Unexpectedly harsh drop
The sales drop was much harsher than economists had expected, which was a ‘mere’ 0.7 % drop. The bad December figures are in line with the lower than expected numbers from November, when retail trade only grew 0.9 % in November, when a 1.4 % growth had been expected.
On a yearly basis, Germany suffered the biggest drop (- 2.4 %), before Belgium (- 1.9 %) and Finland (- 1.3 %). Luxembourg had the strongest surge (+ 9 %). There were no specific numbers available for the Dutch retail market.
Belgians hoard money
It is no surprise that retail trade dropped nearly 2 % in December compared to the year before: the Belgian National Bank had announced that Belgians had accumulated 249.8 billion euro in their bank accounts, nearly 3 billion euro higher than in November.
Holiday bonuses undoubtedly had something to do with that, as people put those aside for the future. November marked the first time since April 2012 that we had saved less (500 million euro less than in October) and when banks were drafting up the 2013 numbers, they noted that Belgians had started to put less money aside. Unfortunately for retail that was not the case for holiday bonuses - and every euro in the bank is a euro not spent in a store.