Euro zone retail sales drop in March, February revised up

BRUSSELS (Reuters) - Euro zone retail sales fell sharply in March, pointing to weaker household demand, but sales in February were revised upwards, data showed on Wednesday.

The European Union's statistics office Eurostat said retail sales in the 17 countries using the euro fell 1.0 percent month-on-month in March for a 1.7 percent year-on-year drop.

Economists polled by Reuters had expected a 0.1 percent monthly rise and a flat year-on-year reading.

The March year-on-year decline in the sales figures, which are a good indication of household demand, was the biggest since November 2009, when they fell 2.4 percent in annual terms.

But Eurostat also revised upwards the retail sales data for February -- to 0.3 percent monthly growth from a 0.1 percent decline and to a 1.3 percent annual rise from 0.1 percent.

The European Central Bank meets on interest rates on Thursday and economists will be watching for indications that the bank would aim for a rate rise in June, rather than in July, to stem a rise in consumer prices, fueled by more expensive oil.

Eurostat said the biggest monthly decline in retail sales in the euro zone was in Portugal, where the government is implementing a tough austerity program to regain the confidence of financial markets. Sales volumes were down 4.7 percent from February.

The second biggest monthly drop, of 3 percent, was in Slovenia and the third biggest, a fall of 2.1 percent, was in the euro zone's biggest economy, Germany.

(Reporting by Jan Strupczewski, editing by Rex Merrifield)