Distributive trades Download chapter 5 of Key figures on European business in PDF format

Structure

Distributive trades cover motor trade (including maintenance and repair), wholesale and retail trades. Wholesale trade was the largest of these three divisions in value added terms, with 50.2 % of the distributive trades total in 2018 compared with 37.9 % for retail trade. In employment terms, the situation was reversed, with retail trade contributing 55.3 % compared with 32.7 % for wholesale trade.

Germany had the largest share of EU-27 value added in all three distributive trades divisions in 2018, followed by France and Italy. For motor trade (including maintenance and repair) and for retail trade, Spain was the fourth largest followed by the Netherlands, while the order was reversed for wholesale trade. In employment terms, the main difference was that Poland was the fifth largest EU Member State (whereas the Netherlands was not in the top five). The shares were somewhat different for wholesale trade, as France's level of employment in this activity was smaller than those of Italy and of Spain.

Given the essential, local nature of many distributive trades activities, there tends to be less geographical specialisation than observed for many industrial or other service activities. For example, 15.6 % of distributive trades value added in Finland was recorded motor trades (including maintenance and repair), in 2018, more than in any other EU Member State, but this was not much more than the EU-27 average (11.9 %).

Luxembourg (67.5 %) and the Netherlands (63.3 %) were the top two EU Member States in terms of the wholesale trade contribution to distributive trades value added in 2018, underlying their specialisation in distribution, transport and logistics. Cyprus (47.6 %) and Malta (46.9 %) — two Member States that host large numbers of tourists each year — recorded the highest contributions of retail trade to the total value added of distributive trades, closely followed by Slovakia (46.6 %) and Croatia (46.3 %).

Typically, the lowest average personnel costs can often be observed in sectors with a high incidence of part-time and seasonal work, such as retail trade. Across the EU-27's distributive trades' sector, average personnel costs in 2018 ranged from a high of EUR 40.8 thousand per employee for wholesale trade down to a low of EUR 23.3 thousand per employee for retail trade.

In 2018, Belgium recorded the highest average personnel costs among EU Member States for motor trade (EUR 59.7 thousand per employee) and for wholesale trade (EUR 66.4 thousand per employee). Sweden had the highest average personnel costs for retail trade (EUR 39.8 thousand per employee). At the other end of the scale, the lowest average personnel costs for all three distributive trades divisions were recorded in Bulgaria, Romania and Latvia.

Internet retailing has gained in significance over many years. In 2018, the subsector covering retail sale via mail order houses or via internet accounted for 4.6 % of retailing value added and 3.5 % of retailing employment within the EU-27. In value added terms, Germany and the Netherlands were the most specialised EU Member States in these forms of remote trading, while Cyprus and Portugal were the least specialised.

Developments

The turnover index illustrates the development of sales in current prices, in other words this index has not been adjusted to remove the effects of inflation. Between 2000 and 2019, the EU-27 turnover index for distributive trades increased overall by 60 %, equivalent to an average of 2.5 % per year.

In the years just before the global financial and economic crisis, the increase in the EU-27 distributive trades turnover index slowed, before a fall of 10.7 % was observed in 2009. Growth returned quite strongly in 2010 and 2011 but was then rather subdued for several years (including a slight fall in turnover in 2013). Stronger growth was again observed from 2017-2019.

In turnover terms, the fastest growing distributive trades activity in the EU-27 was wholesale trade; its turnover was 63 % higher in 2019 than it had been in 2000, an annual average increase of 2.6 %. Increases in turnover for the motor and retail trades were slightly more subdued, up 57 % and 54 % overall between 2000 and 2019.

The volume of sales index for retail trade is adjusted for price changes in the goods that are sold. Between 2000 and 2020, this index increased in the EU-27 by 26 % overall, compared with an increase of 52 % for the retail trade turnover index (in current price terms). Relatively low overall growth (in volume terms) was observed between 2000 and 2019 for retailing of textiles, clothing, footwear and leather goods in specialised stores (up 17 %), food, beverages and tobacco (up 14 %) and automotive fuel in specialised stores (11 %). The COVID-19 pandemic had a diverging impact on the retail sale of these goods: the volume of sales for food, beverages and tobacco was up 3.2 % in 2020, while considerable declines were recorded for automotive fuel (-13.5 %) and for textiles, clothing, footwear and leather goods (-24.4 %). The fastest growth in sales between 2000 and 2020 was observed for dispensing chemists and retailing of medical and orthopaedic goods, cosmetic and toilet articles in specialised stores (up 67 % overall, including a modest expansion in 2020).

As already noted, internet retailing has gained in significance over many years. Between 2000 and 2020, the EU-27 turnover index for retail sale via mail order houses or via internet increased by 221 %, corresponding to an average of 6.0 % per year. For comparison, the average increase for retail trade as a whole was 52 %, equivalent to 2.1 % per year. Turnover growth for retail sale via mail order houses or via internet was relatively moderate before 2008, was generally higher thereafter and has been particularly strong since 2015: annual growth rates were 10 % or higher in five out of the six most recent years for which data are available, including 25.0 % growth in 2020.

Impact of COVID-19 pandemic

The main decline in distributive trades turnover during the early stage of the COVID-19 crisis was in March and April 2020, with a strong recovery in May and June. To assess the impact of the first wave of the pandemic, sales in April 2020 can be compared with those in February 2020. The strongest decline among the distributive trades divisions was recorded for motor trades, as EU-27 sales were down overall by 55 %; by contrast, turnover fell by 20 % both for wholesale trade and for retail trade. To give some context to the relative importance of these figures, the wholesale and retail trade sectors accounted for 9.3 % and 7.0 % of value added in the EU-27's non-financial business economy in 2018, while motor trades was considerably smaller (2.2 %).

Distributive trades turnover rebounded strongly in the late spring / early summer 2020, although further contractions in sales were observed later in 2020. By November 2020, distributive trades turnover was 96 % of the level it had been in February 2020.

Between February and April 2020, the EU-27 volume of sales index fell by 22 % for non-food products and by 1 % for food, beverages and tobacco, while there was a 20 % increase in sales via mail order houses or via internet. By December 2020, the volume of sales index for retail trade was 99 % of the level it had been in February 2020; for sales via mail order houses or via internet, the index was 127 % of the February level.

These considerable differences should be considered in relation to the relative importance (or weight) of each activity. For example, the retail sale of food, beverages and tobacco in the EU-27 was about eight times as large — in value added terms — as retail sales via mail order / internet. The retail sale of food, beverages and tobacco represented 2.6 % of value added within the EU-27's non-financial business economy in 2018, while retailing of non-food products accounted for a 4.4 % share and retail sales via mail order / internet for 0.3 %.