Retail activity in the euro area showed modest but encouraging growth in June 2025, signalling a slight rebound in consumer confidence. Retail trade volume rose by 0.3 percent month-over-month, reversing the 0.3 percent decline recorded in May. On an annual basis, the retail index climbed by a notable 3.1 percent, reflecting healthier consumer demand compared to June 2024.

Across categories, all segments contributed positively to this growth. Non-food products (excluding automotive fuel) led the way with a 0.6 percent monthly increase, suggesting stronger discretionary spending. Automotive fuel sales rose by 0.4 percent, and food, drinks, and tobacco edged up by 0.2 percent, pointing to steady essentials-based consumption.

The year-over-year data further confirms this positive momentum as non-food products surged by 4.3 percent, while automotive fuel and food-related sales increased by 4.0 percent and 1.7 percent respectively. This broad-based growth hints at easing inflationary pressures and a cautiously improving consumer outlook.

Overall, June's data paints a picture of a retail sector regaining stability, fuelled by a blend of necessity-driven and lifestyle purchases, offering a welcome signal of resilience amid wider economic uncertainty. This update takes the euro area RPI to 25 and the RPI-P to 27, meaning that economic activities remain well ahead of the expectations of the euro area economy.

Sales are expected up 0.4 percent on the month and up 2.6 percent on year in June after slipping by 0.7 percent on the month and rising 1.8 percent on year in May.

Retail sales measure goods that are sold to the consumer or end-user, generally in small quantities and in the state in which they were purchased by the retailer. Eurozone retail sales are reported monthly, in volume terms and exclude autos and motorcycles. A limited sector breakdown is presented in the first release but much more detail is available in the following period's release.

Retail sales are important indicators of domestic consumer demand and are monitored closely by analysts as an important input to GDP. If you know what consumers are up to, you will have a pretty good idea on where the economy is headed. Needless to say, that's a big advantage for investors. The data are available in both value and volume measures although the press release deals only with volume. In addition to the total, the initial report provides a limited breakdown that separately identifies food, drink and tobacco, and (excluding automotive fuel) non-food products. A more comprehensive dataset is only available with the following month's release. Unlike the U.S. and Canada, auto sales are not included in the retail sales data.

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.

Retail sales not only give you a sense of the big picture, but also the trends among different types of retailers. Perhaps auto sales are especially strong or apparel sales are showing exceptional weakness. These trends from the retail sales data can help you spot specific investment opportunities, without having to wait for a company's quarterly or annual report.