Consumer gloom spreads across Europe

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Consumer gloom spreads across Europe

Consumer gloom spreads across Europe
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German consumer sentiment has fallen to its lowest level in 10 months.

A survey by top market research firm GfK found that despite low unemployment and rising wages Germans are worried their economy will suffer from worldwide weakness hitting exports.

The forward looking survey also showed fear that Germany will be asked to contribute more money in bailouts to rescue euro zone countries mired in the debt crisis.

Across Europe there is word that people are cutting spending and feeling gloomier about the future as fears of a double-dip recession rise and stock markets wobble.

In the UK the Nationwide building society said its consumer sentiment index dropped 2 points to 49 in July, well below its long-term average of 79 and not far above February’s all-time low of 41 points.

“It may be that we see a further deterioration in August, following riots in a number of UK cities and sharp declines seen in stock markets around the world,” Nationwide chief economist Robert Gardner said.

British retailer the Co-Operative Group said the environment for consumers was the toughest for over 40 years, with spending on food — not normally affected by boom or bust — falling.

“It is the worst I have seen in over 40 years of retailing,” chief executive Peter Marks said of conditions for the consumer as the Co-Op, Britain’s fifth-biggest food retailer, posted a 12 percent drop in first-half profit.

And Dutch grocer Ahold said shoppers were hunting out goods on promotion and switching to cheaper own-brands as they try to offset rising food prices.

It missed forecasts with a 21 percent drop in second-quarter profit, following weaker-than-expected results from rivals like German group Metro and Belgian company Delhaize earlier this month.

French group Carrefour , the world’s second-biggest retailer, was set to report first-half results next Wednesday, having warned on profit last month.