Italy’s retail sales fell in May 2025. The latest data shows a 0.4% decrease compared to the previous month, an improvement from the earlier decline of 0.7%. Year-over-year, retail sales rose by 1.3%, down from 3.7% in the previous period. In the three months before May 2025, retail sales dropped by 0.1% in value and 0.5% in volume. Comparing to May 2024, large retailers saw a 3.2% increase, while small retailers faced a 0.4% drop. Non-store sales remained the same, but online sales decreased by 0.9%. Looking at non-food products, different sectors had different year-on-year trends. Cosmetics and toilet articles grew by 4.3%, and optical instruments and photographic equipment went up by 2.7%. In contrast, sales of stationery, books, newspapers, and magazines declined by 3.5%, while computers and telecommunications equipment dropped by 2.6%. In summary, the latest retail data indicates a slowdown in Italian consumer spending. Although annual sales are slightly higher than last year, the gain of 1.3% is smaller. Month-to-month, there’s a clear drop of 0.4%, and this trend has been observed over the past three months, with value down by 0.1% and volume down by 0.5%. Large retailers are still showing robust sales growth at 3.2% year-on-year, but small businesses are struggling with a 0.4% decline. Non-store sales are flat, and online shopping has decreased by almost 1%. This suggests that even if prices remain high, the volume of sales is decreasing, reflecting changing consumer behavior influenced by costs and sentiment. Breaking down non-food categories gives more insight into the trends. Cosmetics and photographic gear are performing well, indicating some consumers are willing to spend on non-essential items, but only selectively. Conversely, sales for books, paper goods, and technology-related products are declining. This suggests waning interest in both digital hardware and print media, highlighting weaker demand in sectors that were once strong during and after the pandemic. Moving forward, it’s crucial to focus on the current landscape. Notice the decline in volume despite steady prices, as this usually points to margin compression and weaker demand. When large retailers do well during downturns, it often means consumers are changing their spending habits rather than increasing purchases. Bigger chains can offer discounts that smaller businesses can’t, skewing the data and obscuring underlying trends. The recent drops in retail turnover, especially when matched by declines in volume, indicate price sensitivity. Tracking value against volume is essential. A significant volume drop, especially in the tech and publishing sectors, suggests taking a cautious approach in related areas. The difference between flat and declining categories is stark. For example, stable non-store sales might seem neutral, but in a cooling market, it signals stalled growth. Moreover, the 0.9% drop in online sales during a time when digital adoption should be rising is concerning, hinting at fierce competition or consumers opting out of discretionary buying. This trend is not encouraging. We have seen this pattern before: strong annual figures followed by weak monthly and flat quarterly results often signal a shift—not just in the retail industry but also in consumer behavior. When discretionary categories diverge, it’s wise to avoid making blanket assumptions about retail health. Some segments may thrive temporarily, but overall strength is currently limited. Smaller retail businesses are under strain, and the overall volume is decreasing. It’s prudent to stay vigilant about potential overpricing in consumer contracts, especially those expecting a recovery in volume before summer ends. Without a clear driver for growth and with continuing declines in real turnover, the best strategy is to prioritize resilience over trying to capitalize on rebounds.

here to set up a live account on VT Markets now