EU Retail Sales MoM for December 2025: A Moderate Rebound Amid Lingering Uncertainties
Key Takeaways: December 2025 retail sales in the EU rose 0.20% month-over-month, doubling expectations and reversing November’s 0.30% decline. This moderate rebound signals tentative consumer confidence amid tightening monetary policy and geopolitical tensions. However, risks from inflation persistence and external shocks remain. The data suggests a cautiously optimistic outlook for Q1 2026 economic growth.
Table of Contents
- Big-Picture Snapshot
- Foundational Indicators
- Chart Dynamics
- Forward Outlook
- Closing Thoughts
- Key Markets Likely to React to Retail Sales MoM
EU retail sales for December 2025 increased by 0.20% month-over-month (MoM), according to the latest release from the Sigmanomics database. This figure notably exceeded the consensus estimate of 0.10% and reversed November’s 0.30% contraction. Compared to December 2024, retail sales are up approximately 1.50%, reflecting a slow but steady recovery in consumer spending after a volatile autumn.
Drivers this month
- Holiday season demand boosted discretionary spending, particularly in apparel and electronics.
- Energy price stabilization helped ease household budget pressures, supporting retail purchases.
- Online retail channels continued to gain market share, offsetting weaker foot traffic in physical stores.
Policy pulse
The ECB’s ongoing monetary tightening, with key rates raised by 25 basis points in December, has started to temper credit growth. However, the retail sales rebound suggests consumers are still willing to spend despite higher borrowing costs, possibly due to improved wage growth and fiscal support measures.
Market lens
Following the data release, the EUR/USD pair strengthened modestly by 0.15%, reflecting improved sentiment on the eurozone’s consumption outlook. Short-term yields on German bunds rose by 5 basis points, signaling expectations of sustained ECB hawkishness amid resilient demand.
Retail sales are a critical indicator of household consumption, which accounts for roughly 55% of EU GDP. The 0.20% MoM increase in December 2025 contrasts with the 0.30% decline in November and a flat reading in October, marking a return to positive momentum after two months of stagnation or contraction.
Historical context
- December 2025: 0.20% MoM
- November 2025: -0.30% MoM
- October 2025: 0.00% MoM
- 12-month average (Jan–Dec 2025): 0.15% MoM
Monetary policy & financial conditions
The European Central Bank’s (ECB) rate hikes since mid-2025 have tightened financial conditions, with the main refinancing rate now at 3.75%. Despite this, retail sales growth in December suggests that the lagged effects of monetary policy have yet to fully dampen consumer spending. Credit growth slowed to 2.10% year-over-year in December, down from 3.00% in September, indicating cautious borrowing behavior.
Fiscal policy & government budget
EU governments maintained moderate fiscal support through targeted subsidies and tax reliefs, particularly in energy and low-income households. These measures helped sustain disposable incomes and retail demand during the winter months. The EU’s fiscal deficit narrowed slightly to 2.80% of GDP in Q4 2025, reflecting improved revenue collection amid economic stabilization.
What This Chart Tells Us
The upward trend in December retail sales signals a tentative recovery in consumer confidence and spending power. This reverses the downward pressure seen in late 2025 and suggests that inflation moderation and fiscal support are beginning to stabilize household demand. However, the pace remains modest, indicating cautious optimism rather than a full rebound.
Market lens
Immediate reaction: EUR/USD strengthened 0.15% post-release, while 2-year German bund yields rose 5 basis points, reflecting expectations of sustained ECB tightening amid resilient consumption data. The Euro Stoxx 50 index gained 0.30%, buoyed by consumer discretionary stocks.
Looking ahead to Q1 2026, retail sales momentum will be shaped by several factors. On the upside, continued wage growth, easing inflation, and fiscal support could sustain consumer spending. On the downside, tighter credit conditions and geopolitical risks, including energy supply uncertainties, may weigh on demand.
Scenario analysis
- Bullish (30% probability): Inflation falls below 2%, ECB pauses hikes, and consumer confidence surges, driving retail sales growth above 0.40% MoM.
- Base (50% probability): Inflation moderates slowly, ECB maintains current rates, and retail sales grow steadily at 0.15–0.25% MoM.
- Bearish (20% probability): Inflation spikes due to external shocks, ECB tightens further, and retail sales contract by 0.10–0.20% MoM.
Risks to monitor
- Energy price volatility linked to geopolitical tensions in Eastern Europe.
- Potential supply chain disruptions affecting retail inventories.
- Consumer debt levels rising amid higher interest rates.
December 2025’s retail sales data from the Sigmanomics database offers a cautiously optimistic signal for the EU economy. The 0.20% MoM increase, surpassing expectations, suggests that consumer spending remains resilient despite tighter monetary policy and external uncertainties. However, the modest pace and mixed sectoral performance highlight ongoing challenges. Policymakers and investors should watch inflation trends, credit conditions, and geopolitical developments closely as they will shape the trajectory of consumption and broader economic growth in 2026.
Key Markets Likely to React to Retail Sales MoM
The EU retail sales MoM figures are closely tracked by currency, bond, equity, and crypto markets due to their direct link to consumer demand and economic health. The following symbols historically show price movements correlated with retail sales data:
- EURUSD – The euro-dollar pair often reacts to EU consumption data, reflecting shifts in economic outlook and monetary policy expectations.
- DAX – Germany’s benchmark index is sensitive to retail sales trends given its export-driven economy and consumer sector exposure.
- ASML – A key European tech stock, ASML’s performance can be influenced by consumer demand for electronics and capital goods.
- BTCUSD – Bitcoin often reflects broader risk sentiment shifts triggered by macroeconomic data releases.
- GBPUSD – The British pound-dollar pair can move on EU data due to trade and economic linkages with the UK.
FAQs
- What does EU Retail Sales MoM indicate?
- It measures the monthly change in total retail sales, reflecting consumer spending trends and economic health.
- How does retail sales data affect monetary policy?
- Strong retail sales may prompt central banks to tighten policy to control inflation, while weak sales could lead to easing.
- Why is December 2025’s retail sales data important?
- It signals consumer resilience amid tightening financial conditions and geopolitical risks, guiding forecasts for 2026.
Takeaway: December’s retail sales rebound highlights a fragile but positive consumer outlook in the EU, balancing inflation pressures and geopolitical uncertainties as 2026 unfolds.
Updated 1/9/26
This has been drafted with AI assistance and then thoroughly reviewed, refined, and approved by our human editorial team to ensure accuracy, and originality.
December 2025 retail sales rose 0.20% MoM, up from November’s -0.30% and above the 12-month average of 0.15%. This rebound marks a clear inflection point after two months of weak consumption.
Seasonally adjusted data show that core retail categories such as clothing (0.35%) and household appliances (0.28%) led the gains, while food and beverages remained flat (0.02%). Online sales expanded by 0.40%, underscoring the ongoing shift in consumer purchasing behavior.