* Carrefour sees first sales rise in Spain since 2008
* Dixons reports recovery at Greek business
* Consumer sentiment improving in southern Europe
* French hypermarkets seen growing again
* Ahold hit by tough Dutch, U.S. markets
By James Davey and Dominique Vidalon
LONDON/PARIS, Jan 16 (Reuters) - Sales at European retailersCarrefour, Metro and Dixons Retail have returned to growth in southern Europe as consumers startspending again after years of economic turmoil, austerity andjob losses.
Europe's biggest retailer Carrefour said its sales in Spain grew in the fourth quarter for the first time since 2008, whileFrench hypermarkets improved further, though at a slower pacethan in the previous quarter.
Dixons, the continent's No. 2 electricals retailer, sawsales at its Greek business, Kotsovolos, rise 3 percent in theNov. 1-Jan. 4 period, driven by its wholesale business. However,sales at retail stores that have been open for more than a yearfell 8 percent.
"It's still quite tough in Greece and the market is stillunder pressure. We are beginning to see some evidence that it isflattening out," Chief Executive Sebastian James told reporters."That business is going to come right."
The euro zone debt crisis began in Greece in 2010, forcingAthens to take a bailout under which the European Union and IMFdemanded deep budget cuts, sending unemployment soaring andprovoking violent protests. As speculation swirled in 2012 thatGreece could abandon the euro, Dixons stockpiled securityshutters to protect its nearly 100 stores in the country.
Recent data suggests the economy is on the brink ofrecovering from a six-year recession, boosted by a rebound intourism and rising investment and exports.
However, Greek consumers' incomes have shrunk about 40percent since the crisis began and in Athens the mood remainsgloomy. Many poured into the capital's main shopping street atthe start of the winter sales but few were buying, despite 50percent discounts.
"People come, look, and leave. They have other priorities,"said Katerina Graspa, 53, who is struggling to keep herhousehold goods shop in business.
Dixons, which has been benefiting from strong demand fortablet computers, has sold off units in Turkey and Italy, butplans to stick with Greece as it is the market leader there, although the country accounts for a small part of group sales.
Shares in the British-based group were down about 6.25percent by 1325 GMT after it gave a cautious outlook for therest of the year, while Carrefour dipped 3.3 percent after theFrench retailer reported slowing growth in Brazil, itssecond-biggest market.
IMPROVING MOOD
Euro zone economic sentiment rose more than expected inDecember, as the mood improved in Spain and Italy more than in Germany and France, while industrial production rose in Novemberat its fastest pace in nearly four years.
The southern periphery, where the crisis erased tens ofthousands of jobs, saw some improvement as Spain's outputreturned to growth and Portugal's production rose 1.5 percent.
Metro AG, Europe's fourth-biggest retailer, saidon Monday sales had grown slightly at its cash and carrybusinesses in Spain and Italy although like-for-like sales fellin its home market Germany.
Carrefour said quarterly sales rose 0.2 percentlike-for-like in its third-largest market Spain, but theeconomic climate was still tough in Italy where they were down5.9 percent.
Retailers across Europe have been struggling as shoppers'disposable income has been squeezed by subdued wage growth andthe government austerity measures.
Recent Greek retail sales data suggests a slowdown in theslump but they remain volatile and there few signs ofstabilisation. The annual pace of decline in retail sales byvolume slowed for a third straight month in October to 2.3percent, from 14 percent in July.
Economists expect private consumption, the main driver ofretail sales, to be the final element to recover in an economyhit by the record unemployment.
"There's a feeling that we'll never repay our debts. How canour mood change?" said mechanic Yannis Markos, 42, on his way topay a bill. "Apart from car fuel I don't buy anything formyself."
Carrefour has been hurt by reliance on the hypermarketformat it pioneered, as time-pressed customers shop more locallyand online, and buy non-food goods from specialists.
On Tuesday, Carrefour's smaller French rival Casino said it expected sales at its domestic hypermarkets toreturn to growth in the next six months as it would reap thefull benefits of earlier price cuts.
However, grocer Ahold reported asteeper-than-expected decline in fourth-quarter sales as theU.S. food market contracted and customers spent less in itsDutch home market, dragging its shares down 3.5 percent.
