Impact of Covid-19 crisis on retail trade
Data from September 2020
In July 2020, total European retail sales decreased by 0.8 % compared with June 2020. The total sales volume is now equal to 98.8 % of the volume reached in February before the Covid-19 crisis; in the euro area the degree of recovery was the same.
This article is part of an online publication presenting the development of short-term business statistics (STS) indicators in the Covid-19 crisis. The results, presented in this article, concern the development of the retail trade volume indicator. In the following weeks, Eurostat will continue to update information on industrial production, construction and services in other articles forming the online publication. For the publication of new data see the STS release calendar.
Please also see the monthly Eurostat News Release 3 September 2020.
Covid-19 containment measures in Europe
The Covid-19 virus hit Europe in January and February, with the first cases confirmed in Spain, France and Italy. To fight the pandemic, EU Member States took a wide variety of measures. As of 17 March, EU Member States imposed temporary restrictions of non-essential travel from third countries into the EU (exceptions were foreseen for nationals of all EU Member States and Schengen Associated States). Most countries also imposed restrictions on the movements between EU Member States (an overview of the measures can be found here).
Schools were closed in most Member States in the second week of March. Public events were cancelled by almost all Member States and private gatherings (with numbers of persons varying from 2 to 50) were banned. In almost all countries, bars, restaurants and hotels were closed. In addition, most countries closed retail shops with the exception of supermarkets, pharmacies and banks. In Italy and Spain, non-essential production was stopped and several countries imposed regional or even national lockdown measures which further stifled the economic activities in many areas.
The large majority of the prevention measures were taken during mid-March. Most of the prevention measures and restrictions were kept for the whole of April. In May, several of the measures were abandoned or at least reduced in scope and severity. Among other things, many shops could re-open in May and as a consequence retail trade activities picked up again after two months of unprecedented declines.
Development of retail trade volume in July 2020
In July 2020, the retail volume (price adjusted turnover) in the EU-27 decreased by 0.8 % compared with June 2020 and increased by 0.7 % compared with the previous year. In the euro-area, the decrease in July 2020 compared with June 2020 was 1.3 %, compared with July 2019 there was an increase of 0.4 % (note that the year on year rates are calculated with data that are only calendar adjusted.)
Figure 1 shows the development of the retail trade volume between January and July 2020 for the total and the various product groups (e.g. food, non-food, automotive fuel, etc.).
In March and April, all non-food product groups had shown exceptionally large decreases, in particular the decline for textiles, clothes and footwear was extremely steep (-78.1 % between February and April). Pharmaceutical products had seen an increase in March but then dropped in April, resulting in a total loss of 12.4 % over the two months. The two months loss for automotive fuel was 43.3 %, for computers, books and similar products it was 40.8 % and for electrical goods and furniture it was 34.2 %.
In May and June, sales for all non-food product groups picked up again and the February levels of sales were regained or in some cases even exceeded for some product groups. This positive trend was, however, not continued in July. The general level of sales dropped slightly and, to some extent, the recovery of sales that had been achieved in May and June was lost again in July. Only the sales of electrical goods, furniture and similar now stand clearly above the February level (107.5 %).
The development for food, drink and tobacco products was somewhat different from the development of non-food products and less volatile. For this product category, sales increased in March (maybe partly due to “panic buying”) and then declined in April to increase again in May. In June, sales went down again and more or less stabilised in July. At the moment, the total level of sales of food products is around 98.5 % of the pre-crisis level in the EU-27.
Figure 2 indicates the levels of retail trade volume according to different modes of sales, i.e. for supermarkets, department stores and for internet sales (a combined index for sales in all specialised stores is not available). Since supermarkets remained generally open during lock-down measures in March and April, they saw an increase of sales in March. However, sales went back to more normal levels in the following months. Department stores which were closed in many countries experienced a decline which has as yet not been compensated. Internet sales had already been on the increase for several years. The Covid-19 crisis further boosted this trend and the sales via this channel increased quite dynamically in March, April and May. As shops reopened in the European countries, the development of internet sales was somewhat curbed in June and July, yet the level of sales is clearly above the February level.
Table 1 shows the month on month growth rates according to product groups and mode of sales for the months from March to July, as well as the rates for the crisis month from February and April and the rates for the recovery phase between April and July. The last column, entitled “recovery”, indicates the relation between the recent July level of the retail trade volume and its February level. As can be seen, the sales level for food, drinks and tobacco, as well as the sales levels in supermarkets are almost back to the February values, whereas for many non-food products there is still a sizeable gap between now and before the Covid-19 containment measures. In particular, the sales levels for textiles, clothing and footwear are just above three quarters of what was sold in February. The consumption of fuel is also clearly below the pre-crisis level.
For comparison, Figure 3 shows how the various retail trade categories usually developed on average during the years 2010 – 2019 (to make the various index levels comparable, all years have been re-referenced to January to April = 100). Generally, most product categories show a relatively steady but moderate increase in sales volume between January and July. As Figure 3 indicates, the changes from one month to the next are usually around the size of one or two index points; the magnitude of the current declines and increases is quite unprecedented.
Comparison with 2008
The global financial crisis in 2008 had dramatic effects on the production in industry and construction (for a detailed analysis of the 2008 crisis on STS indicators see here; its effects on retail trade were comparatively modest, however (see Figure 3).
Between January 2008 and December 2008, the total retail volume index for the EU-27 dropped by 1.8 index points, compared with a drop of 22.4 points in March and April 2020. The strongest decline in 2008 was measured for electrical goods, books, and furniture (-4.7 points), the index for automotive fuel dropped by 2.2 points and the index for textiles by 2.8 points. The mail orders and internet volume dropped by only half an index point.
Declines in 2020 were much steeper. In April 2020 compared with two months earlier, the index for the sales volume of textiles dropped by 80.2 points, the index for automotive fuel by 46.2 points and the indices for computer equipment, books and for electrical appliances and furniture by 46.1 and 39.9 points respectively. At the same time, the mail orders and internet volume increased by 28.5 index points.
Development by country
Since the Covid-19 containment measures differed between countries as to timing and strictness, it was to be expected that the effects on retail trade would also vary. Table 2 shows the monthly rates of change between March and July, as well as the rates between February and April (the months of the crisis) and April and July (the months of recovery). The table also includes the ratio between the July index levels and the February levels (“recovery”).
More than half of the countries for which data are available have by now regained or almost regained the sales level of February, some countries (e.g. Denmark, Ireland, France, the Netherlands) have even clearly surpassed the pre-crisis levels. The countries with the lowest recovery levels are Bulgaria (80.0 %), Malta (90.9 %), and Portugal (90.7 %).
Source data for tables and graphs
The latest results for the development of retail trade are published in monthly news releases by Eurostat.
According to the STS-Regulation the retail trade volume index is published only 30 days after its reference months. At this early stage it is normal that no complete coverage of data can be ensured by National Statistical Institutes and that data have to be estimated to some degree. As a consequence, revisions occur during the publications that follow.
The Covid-19 crisis posed additional problems for data collections, since for example closed shops could not be reached or did not supply any data. Moreover, it was not clear if missing data might not be due to businesses being permanently closed. As a consequence, it may be expected that revisions of the first retail volume data could be subject to greater revisions than is usually the case.
The data in this article are, for several Member States, based on fewer statistical observations than usual or alternative sources. For missing data, imputation and estimation methods were applied. Information on the compilation of short-term business statistics during the COVID-19 crisis can be found here and (specifically for STS) here.
- Trade and services (t_sts_ts)
- Wholesale and retail trade (NACE G) (t_sts_wrt)
- Turnover and volume of sales (t_sts_wrt_ts)
- Wholesale and retail trade (NACE G) (t_sts_wrt)
- Trade and services (sts_ts)
- Wholesale and retail trade (NACE G) (sts_wrt)
- Turnover and volume of sales index (sts_wrt_ts)
- Wholesale and retail trade (NACE G) (sts_wrt)