Euro zone retail sales rebound in January before virus shock

FILE PHOTO: Customers and employees of a shopping mall watch the demonstrations of supporters of the movement of Patriotic Europeans Against the Islamisation of the West (PEGIDA) and their opponents in Frankfurt, January 26, 2015. REUTERS/Kai Pfaffenbach

BRUSSELS (Reuters) - Consumers in the euro zone began the year in spending mode, estimates for January from the EU statistics office showed on Wednesday, before the coronavirus outbreak likely dampened retail sales.

Eurostat said retail sales in the 19-nation currency bloc rose 0.6% in January from December for a 1.7% gain year-on-year. The month-on-month reading was in line with market expectations.

The rise in spending followed a 1.1% decline in sales in December, but it could prove short-lived as consumers began staying away from shopping malls from mid-February as the coronavirus outbreak spread to Europe from China.

The coronavirus scare boosted sales of emergency goods, such as sanitary products and food supplies, but economists expect a demand shock as many people stay at home and reduce their economic activities.

In January, euro zone shoppers increased by 0.7% during the month their spending on food, drinks and tobacco products, Eurostat estimates showed.

Retail sales rose mostly for fuel, by 1.9% compared to December, driven by falling oil prices.

By contrast, consumers shopped less online, with mail and internet sales down by 0.5% month-on-month.

Reporting by Francesco Guarascio @fraguarascio; editing by Philip Blenkinsop