ECONOMY

Retail sales decline 10.2 percent in January

Sector has suffered negative figures for 31 months in a row

Spain’s double-dip recession, which has left over a quarter of the working population out of a job, continued to take its toll on consumer spending at the beginning of the year.

According to figures released Thursday by the National Statistics Institute (INE), retail sales in January at constant prices and after adjusting for differences in the number of working days, declined 10.2 percent from a year earlier after a fall of 11.4 percent in December.

The deepening of the recession at the end of last year when GDP shrank 0.8 percent in the fourth quarter from the previous three months has weighed heavily on the retail sector, which last saw an increase in sales in June 2010.

The government’s decision to raise the standard value-added tax rate by three percentage points to 21 percent as of September of last year and the reduced rate by two points to 10 percent also added to the crisis.

All segments of the retail sector suffered falls in sales at the start of this year, with small stores particularly badly hit with an annual decline of 14.2 percent. Large stores saw their sales decline by 12.2 percent, while the falls in large chains was limited to 3.4 percent.

Sales of household equipment fell 12.2 percent, while purchases of personal equipment were down 10.4 percent. Households also cut back on food, sales of which dropped 6.0 percent from a year earlier. Sales were down across Spain, with the regions of Catalonia and Galicia suffering the biggest falls of 11.2 percent and 11.0 percent respectively.

The sector also continued to hemorrhage jobs, with employment declining 2.3 percent in January after a fall of 2.0 percent at the end of last year.

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