Spain Retail Sales Fall for Eighth Month as `Crisis
Retail sales in Spain fell for an eighth month in July as record oil prices and higher interest rates eroded consumers' purchasing power.
Sales fell 6 percent from the year-earlier month, after adjusting for the number of days worked, the second-biggest decline since the series began in 2005, the National Statistics Institute said on its Web site today. That decline followed a 7.9 percent slump in June. Adjusted sales fell 0.4 percent on the month.
“Spain has a crisis,'' Nick Hayek Jr., chief executive officer of Swatch Group AG, the world's largest watchmaker, said Aug. 15. “Without any doubt that's the country in Europe that really gives us a headache.''
Spain's economy has been battered by surging gasoline prices and the fastest inflation in 10 years just as the global credit shortage undermines the housing market. House prices fell for the first time in a decade in the second quarter as the European Central Bank pushed interest rates to a seven-year high in its bid to control price gains cashadvance.
Household consumption virtually stagnated in the second quarter as unemployment jumped to the highest in three and a half years. The number of building projects approved slumped 58 percent in May from a year earlier.
“The real-estate sector has bitten us,'' said Hayek, who saw first-half sales in Spain decline. “We are really feeling some problems.''
Polo Ralph Lauren Corp. President Roger Farah said Aug. 6 that he has “some concern in Spain,'' while Spanish clothing retailer Adolfo Dominguez SA canned its plans for expansion after rising costs outstripped sales growth, El Economista reported Aug. 20.
Car sales slumped 28 percent in July from the year earlier period, the Spanish Automakers Association said this month.
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