NEW YORK, September 27 /PRNewswire/ --

At 50.5, compared to 51.0 in August, the Bloomberg Eurozone Retail
Purchasing Managers' Index ("PMI(R)"), an indicator based on a mid-month
survey of economic conditions in the euro area retail sector and providing
data one month ahead of government issued figures, signaled a marginal rise
in retail sales in September and a rate of growth below the modest pace seen
in August. Although the recent growth represents an improvement on the
declines seen in the three months to July, sales during Q3 overall have been
the weakest since Q1 2006.

Rising sales in France and Germany were almost entirely offset by a
further decline in Italy:

-- France saw the strongest increase in sales, with month-on-month growth
       hitting a five-month high, linked in part to improved weather. The
       index increased from 51.1 in August to 54.2, representing a marked
       improvement from July's 18-month low.
    -- Germany recorded a more modest increase in sales than France. The rate
       of increase slipped compared with August (the index fell from 53.0 to
       51.3), but the data signaled a continued recovery from the falling
       sales pattern seen in the three months to July.
    -- In contrast, Italy recorded a decline in sales for the seventh
       consecutive month. The rate of decline hit a 27-month high as the 
       index fell from 47.8 in August to 44.1. Retailers reported that 
       consumer confidence remained subdued.



Despite being up only slightly on August, sales rose on an annual basis
in September for the first time in five months. The year-on-year index was up
sharply from August's 17-month low of 45.1 to 52.5. Sales in France, rose for
the first time in five months and showed the second-strongest annual gain so
far this year. Sales were marginally higher than a year ago in Germany -
though this represented an improvement on the declines seen in the previous
four months - and fell for the fifth successive month in Italy, showing the
second-strongest annual decline so far this year.

Sales by sector - growth led by clothing and food

The clothing & footwear sector reported by far the strongest increase in
annual sales in September, with spend on seasonal items lifted by better
weather (having fallen sharply in August). Moreover, the rise was the
third-largest in the history of the survey. The food & drink sector also saw
markedly higher sales than a year ago, with the improvement also often linked
to better weather. A more moderate but still strong rise was seen in the
pharmaceuticals sector. Sales in the autos & fuel sector continued to fall
sharply, while a more modest contraction was recorded for household goods.

Sales against targets

Sales were again well below retailers' expectations in September, albeit
with the smallest shortfall indicated since targets were met back in April.
The index rose from 38.7 in August to 45.0. Targets were missed to a greater
extent in Italy than Germany, while French retailers met their targets on
average. By sector across all countries, targets were beaten by a
survey-record margin in the clothing & footwear sector, and to a lesser but
still marked extent in food & drink. The autos, household goods and
pharmaceuticals sectors all missed targets.

Retailers expect to beat sales targets in October on average, with the
expectations index dipping only slightly from 58.3 in August to 57.5,
remaining well above the 50.0 neutral level. Retailers in all three largest
euro countries were optimistic about beating targets in October, with French
retailers again by far the most optimistic and German retailers the least
confident. By sector, the strongest confidence was seen amongst clothing &
footwear retailers, followed by the autos sector. Only retailers in the
household goods sector expect targets to be missed in October.

Prices and margins - record high price pressures, led by food & drink
sector

Average prices paid for goods by retailers rose at a new survey-record
rate in September. The index reached 63.6, up from 61.6 in August, driven by
an increase in the rate of inflation to a new survey high in Germany.
Inflation was far weaker in France and Italy than in Germany (and in fact
eased slightly in both countries), though in the former the rate of inflation
remained close to survey-record levels. The steepest rise in prices was
recorded in the food & drink sector for the third month running, where the
rate of increase slipped only slightly from August's record high.
Particularly steep rates of inflation were also seen for clothing & footwear
and household goods.

Retailers' gross margins worsened during September, deteriorating at a
rate only slightly less than the 19-month low seen in August (the index rose
from 42.6 to 43.1). Margins were hit by a combination of higher purchasing
costs and the need to keep resale prices low due to strong competition.
Italian retailers recorded the sharpest deterioration in margins, French
retailers the smallest.

Employment - marginal growth maintained

Retail sector employment in the Eurozone increased for the seventh
consecutive month in September. The index fell from 51.3 in August to 50.3,
indicating the weakest rise in the current period of job creation. Moderate
growth of retail staffing in Germany was offset by declines in France and
Italy.

Retailers' buying and stock trends

Stocks of unsold goods increased for a seventh consecutive month in
September, largely caused by disappointing sales. The index fell slightly
from 51.4 to 51.1, pointing to a modest expansion. Stocks rose in Germany and
Italy, but fell in France for the first time in almost two years.

Purchasing activity amongst Eurozone retailers increased in September,
with the buying index reaching a five-month high of 51.7 (50.7 in August).
Trends varied considerably by country, with strong growth of purchasing in
France linked to optimism with regard to sales contrasting with the steepest
decline for over two years in Italy. A modest increase was recorded in
Germany.

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Notes to editors

The Bloomberg Eurozone Retail PMI is the first monthly report of its kind
in Europe, providing businesses, governments, central banks, economists and
analysts the most accurate and up to date insights and data into the Eurozone
retail sector.

The index, compiled exclusively for Bloomberg by NTC Economics Ltd,
questions more than 1,000 retail executives in Germany, France and Italy.
These countries together represent approximately 75% of total Eurozone retail
sales. National data are weighted together according to each country's
contribution to total Eurozone sales to form the Bloomberg Eurozone Retail
PMI.

The survey tracks retail sales, performance against targets, inventories,
prices, employment and other key indicators. Data are published approximately
one month ahead of government figures.

The Bloomberg Retail PMI report is first published exclusively for
Bloomberg users via the BLOOMBERG PROFESSIONAL(R) service at 09:00 GMT,
followed by a general press release and analysis on BLOOMBERG TELEVISION.
October and November data will be released on the following dates:

-- October data:             Released 30 October 2007
    -- November data:            Released 28 November 2007



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