August retail sales fell 0.5 percent on the month in value, indicative of dwindling consumer appetite. Volumes were also down 0.4 percent, with food dropping 0.2 percent and non-food off a steeper 0.5 percent.

On a yearly basis, nominal sales increased by 0.8 percent and volumes 0.2 percent, wholly due to gains in food. Non-food volumes decreased 0.2 percent, partly due to a significant decrease in sales of household utensils and hardware. This offset the increase in sales of perfumers and personal care products.

Compared to August last year, the value of retail sales for large-scale distribution is growing. On the other hand sales on digital platforms are falling alongside more traditional retail channels. These updates leave the RPI at minus 14 and the RPI-P at minus 13, showing that recent overall economic activity is lagging market estimates.

Having beaten expectations in July, sales in August are seen up a further 0.2 percent.

Retail sales measure the total receipts at stores that sell durable and nondurable goods. The headline data are expressed in nominal terms but volume statistics are also available. Autos are excluded. Only a very limited breakdown of subsector performance is available in the first report but much greater detail is provided in the following month's release. The Italian National Institute of Statistics (Istat) is the main producer of official statistics in Italy.

With consumer spending a large part of the economy, market players continually monitor spending patterns. Retail sales are a measure of consumer well-being. The pattern in consumer spending is often the foremost influence on stock and bond markets. For stocks, strong economic growth translates to healthy corporate profits and higher stock prices. For bonds, the focus is whether economic growth goes overboard and leads to inflation. Ideally, the economy walks that fine line between strong growth and excessive (inflationary) growth.