Data from the Central Statistical Bureau show that in September of this year, a strong growth was registered in Latvian retail trade compared to the corresponding month of the previous year. Total retail sales at constant prices increased by 5.9%, which was among the fastest growth rates of the industry recorded this year.
“Thus, retail sales grew quite strongly in the third quarter of this year, by 4.3%, while overall growth in the sector was weak at 1.6% in nine months. This was due to the sharp decline in retail sales in April due to the coronavirus outbreak and restrictions , “explained the ministry.
The Ministry of Finance pointed out that among the retail product groups in Latvia in September this year, a sharp increase was shown and the largest contribution to the total sales growth was provided by automotive fuel, with its annual sales increasing by 13.4%. Fuel trade has been growing strongly since the beginning of the summer, driven by falling prices as a result of falling oil prices.
“Sales of other non-food products increased by 3.5% in September compared to September of the previous year, driven by strong growth in sales of household electrical appliances, pharmaceuticals and medical supplies, as well as watches, jewelery and other non-classified new products. retail sale of footwear, retail sale via mail order houses or via Internet shops and retail sale of second – hand goods, “said FM.
The Ministry of Finance referred to the Bank of Latvia’s data, which show that in September household savings continued to increase – compared to September of the previous year, household deposits attracted by Latvian commercial banks increased by 11.7%, reaching 7.92 billion euros.
“Although long-term deposits and deposits redeemable at notice have declined, the increase in total deposits was driven by an increase in retail bank balances at the end of the day, which account for the vast majority or 85% of all household deposits. However, given the caution and uncertainty about their future financial situation as a result of the Covid-19 crisis and the prevailing uncertainty about their future financial situation, citizens choose to save their free financial resources, as indicated by the Consumer Economic Confidence Index, “the ministry said.
The Ministry of Finance associates faster savings with limited opportunities to spend funds on services, for example, due to the Covid-19 crisis, residents are less likely to attend cultural events, restaurants, and practically do not use air services.
“Given the rapid rise in Covid-19 morbidity rates in recent weeks, the dynamics of private consumption are expected to continue to be negatively affected by the declining performance of the services sector.
At the same time, the Ministry of Finance pointed out that the dynamics of retail trade in the other Baltic countries in recent months has also shown a stable recovery from the Covid-19 crisis. For example, in Lithuania, in the worst month of the Covid-19 crisis – April – retail sales suffered twice as hard as in Latvia, showing a decline of 18%, but since June the industry’s growth in Lithuania has been stronger, with growth rates fluctuating between 5-8%. Thus, in nine months, retail sales in Lithuania together show similar growth as in Latvia, amounting to 1.8%.
In Estonia, the 13% drop in April was offset by higher sales in the summer months, with the industry growing by 2.2% in eight months.
In the EU as a whole, the recovery in trade is slower. “Although retail sales in the EU have been growing moderately since June, the industry has continued to decline by 2.1% in eight months,” the MoF concluded.
It has already been reported that the turnover of Latvian retail trade enterprises in September this year, according to calendar adjusted data, at constant prices has increased by 5.9% compared to the corresponding period of 2019, according to the Central Statistical Bureau.
Among them, retail trade of food products increased by 5.3%, while retail trade of non-food products, excluding retail sale of automotive fuel, increased by 3.5%, and automotive fuel – by 13.4%.
Compared to September 2019, the most significant increase in turnover was in retail sale of electrical household appliances – by 32.9%. At the same time, the retail trade of pharmaceutical and medical goods increased by 14%, but the turnover of non-specialized stores, which mainly sell non-food goods, increased by 9%.
Turnover decreased in retail trade by mail order or in Internet shops – by 19.5%, retail sale at stalls and markets – by 14.1%, as well as retail sale of clothing, footwear and leather goods – by 7.8%.
In September 2020, compared to August, the total turnover of retail trade enterprises at current prices, excluding seasonality, decreased by 6.3%.