Rome

Alarm sounded over Italian consumer spending

Real incomes down 0.8%, expenditure fell 2.7% in August

Alarm sounded over Italian consumer spending

(ANSA) - Rome, October 4 - Two separate reports painted an alarming picture about consumer spending in recession-hit Italy on Thursday. National statistics agency Istat released figures that showed Italians' spending power had taken a hit following a 0.8% fall in real income last year. Istat explained that consumer prices climbed 2.9% in 2011 compared to the previous year, but the disposable income of Italian families only went up by 1.9%. The agency added that the propensity of Italians to save fell from 9.7% in 2010 to 8.8% in 2011. Retailers' association Confcommercio, meanwhile, said consumer spending fell 2.7% in quantitative terms and 0.7% in value terms in Italy in August compared to the same month in 2011. "The data shows that families were trying not to spend over a certain threshold, especially in the summer months, after a period of the year in which their disposable incomes registered a major drop, which translated into a net fall in demand," the association said in a report. Confcommercio said there was no evidence to suggest the trend of falling consumer spending with respect to last year will be reversed soon. It said spending on transport goods and services was hit hardest, plummeting 12.4% in August with respect to the same month in 2011. The association added, however, that overall consumer spending in August was slightly higher than it was in July this year, registering a 0.2% month-on-month increase. Last week a study by farmers' association Coldiretti found that 61% of Italians have consciously sought to slash their grocery bills during the crisis. Purchases of milk, oil and fish have declined 7%, 5% and 4% respectively over last year, while spending on fruit, pasta and beef has dropped 1%. Big retail hypermarkets and supermarkets suffered respective sales falls of 3.1% and 1.1% and even discount food stores saw their sales fall 0.1%. The spending drop at discount stores is seen as particularly alarming as it may mean the poor are having to make sacrifices regarding the quality of their nourishment. The government has said it expects Italy to pull out of the recession next year. But the president of the Italian industrial employers' confederation Confindustria said this week that the country will probably have to wait until 2015 for real economic recovery. "We are not going to see a real upturn next year, except for improvements towards the end," said Giorgio Squinzi. "I'd go with a real recovery in 2015".

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