The Christmas shopping season was a big disappointment for eurozone retailers.
There was a sharp fall in demand. It was down 1.0 percent from December 2012.
Even spending on food and drink was lower.
There was also a month-on-month decline from November of 1.6 percent.
Consumers are the weak link in the eurozone’s recovery from its worst ever recession.
They are reluctant to spend at a time of near record unemployment.
The temptation is for retailers to lower prices to entice shoppers back.
But that risks deflation, which could force the European Central Bank to come up with more stimulus measures.
“A weakness in domestic demand doesn’t help the picture on prices. Even if we do see some modest growth in the economy, that doesn’t mean that inflation risks are immediately disappearing,” said Giada Giani, an economist at Citigroup.