A key set of European Commission business and consumer surveys released this week highlights shifting sentiment across the European Union’s (EU) retail sector at the start of 2026.
The monthly data, produced by the Directorate-General for Economic and Financial Affairs (DG ECFIN), underpins the EU retail confidence indicator and related measures of economic sentiment.
These gauges track retailer optimism, consumer mood and broader economic sentiment trends, offering one of the most recent insights into retail sector performance and outlook across the EU.
Retail trade confidence and economic sentiment in focus
The EU’s Economic Sentiment Indicator (ESI), which combines responses from retail, industry, services, construction and consumer surveys, showed improvement in January 2026.
The index rose by 1.9 points in the EU and 2.2 points in the euro area, drawing closer to its long-term average.
Within the ESI framework, the retail confidence indicator remains a key sectoral component. It reflects answers from retailers on recent sales, expectations for future activity and stock levels.
Although still in negative territory, the December 2025 figure showed some resilience, consistent with other business cycle surveys, suggesting tentative stabilisation after an extended period of subdued sentiment in the retail trade.
Consumer mood and spending outlook
Consumer confidence across the EU, while improving in January, continues to sit below long-term averages.
DG ECFIN’s flash estimate indicated the consumer confidence indicator increased by 0.8 percentage points in both the EU and euro area, but remained negative, signalling caution among households.
This soft consumer sentiment is partly mirrored in broader indicators of household economic expectations and future spending intentions.
Despite the uptick from December’s readings, many consumers voiced ongoing concern about economic conditions and financial prospects, which could temper discretionary spending and curb growth in retail sales in early 2026.
Implications for European retail performance
The latest confidence data arrives in a context where retail sales growth has shown modest variation across EU member states. Although some economies reported stable or rising volumes in recent months, the overall sentiment picture underscores persistent caution.
Weak consumer confidence and the negative retail confidence readings in parts of the euro area suggest that retailers may continue to face challenges related to demand and inventory expectations in the near term.
Economic analysts stress that confidence indicators are forward-looking but sensitive to external pressures such as inflation, labour market developments and geopolitical uncertainty.
For the global retail industry, these EU findings reinforce the importance of closely monitoring retail confidence trends and consumer sentiment, particularly as businesses plan inventory and staffing decisions for the spring trading period.
