Italy experienced a decline in retail sales in May 2025. The latest figures show a reduction of 0.4% compared to the previous month, having been at -0.7% before. Over the year, retail sales went up by 1.3%, a drop from 3.7% in the prior period.

In the three months preceding May 2025, there was a decrease in retail sales value by 0.1% and in volume by 0.5%. When comparing the figures to May 2024, sales in large-scale distribution increased by 3.2%, while small-scale distribution faced a decrease of 0.4%. Non-store sales saw no change, but online sales declined by 0.9%.

Trends In Non Food Products

In terms of non-food products, different sectors experienced varied trends year-on-year. The highest increases were in Cosmetic and toilet articles (up by 4.3%) and Optical instruments and photographic equipment (up by 2.7%). Notable declines occurred in Stationery, books, newspapers and magazines (down by 3.5%) and Computers and telecommunications equipment (down by 2.6%).

In simple terms, the latest set of retail data reveals a softening in Italian consumer spending. While annual sales remain slightly higher than last year, the pace has slowed, with a narrower gain of 1.3% year-on-year. Month-on-month, there’s a clear drop—down 0.4%—and that’s not a one-off; the three-month trend is also heading lower. Value is down a touch, by 0.1%, and volume a bit more sharply, falling 0.5%.

Large retailers are still pulling in stronger sales, climbing by 3.2% on the year. But this strength isn’t being felt evenly. Small businesses are under pressure, falling by 0.4%. Non-store sales are flat, and online purchasing has dipped nearly 1%. So even with prices likely still elevated, volumes are drying up. That says a lot about how consumers are behaving in the face of cost and possibly sentiment factors.

Now, picking apart non-food categories, it becomes clearer where the shifts are happening. Cosmetics and photographic gear are growing decently—consumers are still spending in discretionary spots, but selectively. Meanwhile, sales of books, paper goods, computers and other tech-related kits are going backwards. It appears digital hardware and print are both seeing less interest. This isn’t just noise. We can’t ignore weakening demand in sectors where there had previously been robust activity, especially during and post-pandemic.

Analysis Of Retail Trends

Given how we’re positioned, here’s what truly matters over the next stretch. Take note of tightening in volume despite modest price resilience. That imbalance usually indicates margin compression and slippage in demand quality. When large retailers pull ahead during dips, it’s often not because people are buying more, but because they’re shifting spending habits. Bigger chains offer discounts and scale that smaller outlets can’t compete with. That shift of footfall skews the data and hides details under the surface.

Monthly drops in retail turnover—especially when mirrored by similar declines in physical volumes—often show up in price-sensitive instruments. We tend to watch value versus volume very closely. When volume lags this much, particularly while categories like tech and publishing contract, it often helps to lean into directionally cautious stances in related sectors.

The distinction between flat categories and those in decline is sharp. For instance, zero movement in non-store activity might seem neutral, but when it follows a broader cooling off, it underscores a stall in growth. And let’s not forget, online sales falling by 0.9% in a year where digital adoption should be climbing is noteworthy. That points to either competitiveness within the space, or stretched finances where consumers are skipping optional purchases altogether. Not a good sign.

We’ve seen this pattern before. Strong annual figures followed by soft monthly and flat quarterly charts usually point to a pivot—not only in the industry, but also in consumer behaviour. When discretionary categories drift apart like this, it’s often best to avoid generalised assumptions about retail strength. Some pockets will stand tall for a while, but breadth matters—and right now, the breadth is thin.

We’ve got live pressure on smaller retail names and volume sagging across the board. It would follow to stay alert to possible overpricing in consumer-based contracts, especially those assuming volume recovery before summer ends. With no clear catalyst in sight and a slow bleed in real turnover, the better play is to prioritize relative resilience over chasing rebounds.

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