Swiss retail sales growth quickened to a real 3.1 percent in January, the government said on Wednesday, providing more evidence that domestic consumption was starting to support a recovery in the key export sector. Higher spending on health and beauty products, consumer electronics and household furnishings helped drive retail sales compared with January 2003, which had the same number of shopping days, the Federal Statistics Office said. Sales had risen a real 1.3 percent in December. Economists have been watching retail sales data for indications that Switzerland's glum consumers are regaining some confidence and returning to stores.
Last year was bleak for Swiss retailers as shoppers tended to keep a tight rein on their spending in the face of job cuts at leading Swiss industrial firms and finance companies. Swiss retail group Valora said earlier this week it had swung to a net loss in 2003 amid tough conditions for its newspaper stands and convenience stores which serve 1.5 million customers a day. Gross domestic product data for the fourth quarter of 2003 gave the first signal that domestic consumption -- once the bulwark of the small, open economy -- was starting to recover. Switzerland's economy has been lifted from the doldrums by a rise in export sales to key markets such as neighbouring Germany. However, economists warn that any slowdown in Europe could brake the alpine nation's tentative return to growth. With growth remaining fragile and the Swiss franc firming on safe-haven flows after the Madrid bomb attacks, the Swiss National Bank is expected to leave its key interest rate target band on hold at its quarterly policy review on Thursday.///