French retail sector witness further deterioration as sales fall for third straight month in November

The French retail sector witnessed further deterioration, following drop in the sales figure for the third straight month in November. Sales also decreased on an annual basis, albeit at a more subdued pace than in October. Retailers’ targets were missed again, but they remained optimistic that they would be met in December.

The seasonally adjusted headline Retail PMI dropped to 47.3 in November, from 47.5 in October, signalling another solid rate of contraction. Anecdotal evidence suggested that lower sales were, in part, due to a poor economic environment.

Sales remained down on an annual basis in November. The latest year-on-year drop was marked, albeit weaker than seen in the previous survey period. Despite this, retailers remained confident that sales would exceed expectations next month. In fact, the degree of positive sentiment was the highest since April 2011.

French retailers reported a further squeeze on gross margins during November. That said, the rate of decline was the weakest since August. The fall in margins continued to be driven by rising purchasing costs. However, employment in the French retail sector increased at the fastest pace in almost six years during November.

"On a brighter note, the sharpest rise in staffing numbers in almost six years and the highest level of optimism since April 2011 indicate the sector is confident of a turnaround in the coming months," said Alec Gill, Economist, IHS Markit.

Meanwhile, the EUR/USD is trading over 3-week high at 1.07, up 0.09 percent, while at 10:00GMT, the FxWirePro's Hourly Euro Strength Index remained highly bullish at 105.12 (a reading above +75 indicates bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex