European consumers are spending less

With France and Germany reporting a slowdown in household spending, signs of pressure on European consumers are increasing. Consultancy firm Deloitte added to the bad news for retailers by releasing results from a recent report, which states that consumers across nine surveyed European countries will spend 3 percent less on gifts this Christmas. Spending in Germany is expected to drop 9 percent. Only shoppers in Ireland and Spain are expected to increase spending.

"Spending was growing year-on-year until 2003 but since then there has been a change which seems to be turning into a trend," said Deloitte partner, Gilles Goldenberg. "European consumers were told that 2005 would be good...they were sold a recovery that has not taken place. The anticipation for 2006 is gloomy and spending power is perceived to be reduced." The Deloitte report found that 49 percent of the 7,000 Europeans questioned believe they are in a recession.