Impact of Covid-19 crisis on retail trade


Data from May 2021

Next update: June 2021

Highlights


In March 2021, total EU retail sales increased by 2.6 % compared with February 2021; in the euro area the increase was 2.7 %.

The total sales volume in the EU is now equal to 101.6 % of the volume reached in February before the Covid-19 crisis (101.3 % in the euro area).


EU, development of retail trade volume, January 2020 – March 2021, monthly data, seasonally and calendar adjusted (2015=100) - Source: Eurostat (sts_trtu_m)

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. Eurostat will continue to update the information on the effects of the Covid-19 crisis on industrial production, construction, trade and services in the online publication. For the publication of new data see the STS release calendar.

Please also see the monthly Eurostat News Release 6 May 2021.

Full article


Covid-19 containment measures in Europe

The Covid-19 virus hit Europe in January and February 2020, 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 mid-March, EU Member States imposed temporary restrictions on 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 movement 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 2020. 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 throughout 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.

With increasing Covid-19 cases after the summer holidays, several countries re-introduced some containment measures in autumn. At first these did not include the closing of retail shops but rather encompassed hygienic measures, social distancing, restrictions on public gatherings etc., and generally affected mainly service providers (e.g. restaurants). However, at the end of October or during November, several countries stepped up the measures which again resulted in the closing of so-called “non-essential” retail shops. In December, some measures were lifted due to the Christmas season. In January, however, the measures became again more drastic in many countries and numerous shops were closed once more. In March 2021, some measures were lifted. In general, the strictness, lengths and nature of the Covid-19 measures in the EU is relatively heterogeneous. The Covid-19 measures strongly affected the retail trade volume in a number of countries and also impacted the European aggregates.

Development of retail trade volume in March 2021

Retail trade in March 2021 increased by 2.6 % after a relatively strong increase of 3.8 % in February as a result of the easing of Covid-19 measures. In January retail trade had decreased by 4.4 % as a result of the closing of non-essential shops in many Member States. In the euro-area, the monthly increase in March 2021 compared with February was 2.7 %, following an increase in February of 4.2 % and a decrease in January of 5.1 %.

Compared with March 2020, there was a strong increase in the retail trade volume by 11.6 % in the EU and by 12.0 % in the euro area (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 2020 and March 2021 for total retail trade, for food and non-food products and according to the mode of sale.

Regulation (EU) No 2019/2152 of 27 November 2019 (European Business Statistics Regulation) and Commission Implementing Regulation (EU) No 2020/1197 of 30 July 2020, which are applicable for the retail trade short-term indicators as of January 2021, provide for a different activity breakdown of retail trade than the breakdown used in last year’s news releases and articles in Statistics Explained. The former breakdown of retail sales into certain product groups (e.g. textiles, clothes, footwear; pharmaceutical goods; computers and books; electrical goods and furniture) is no longer available for all data series.

Figure 1: EU, development of retail trade volume, January 2020 – March 2021, monthly data, seasonally and calendar adjusted (2015=100) - Source: Eurostat (sts_trtu_m)

The Covid-19 crisis that started in the spring of 2020 had a strong impact on retail trade. In March and April 2020, the total retail trade volume dropped by 9.1 % and 11.2 % respectively. There were, however, considerable differences in food and non-food products. Food products and sales in supermarkets increased in March while the sale of non-food products already went down. In April, all product groups recorded strongly declining sales.

In May and June, sales for all non-food product groups picked up again and the February levels of sales were regained or even exceeded for some product groups. This positive trend, however, did not continue 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 August, however, retail sales picked up again in a quite dynamic way. This positive trend did not continue in September, when sales decreased in almost all product groups. In October, sales generally increased again.

In November (or shortly before) several Member States re-introduced containment measures including the shut-down of many stores. This had a strong impact on European retail sales figures. In December, sales somewhat improved as a result of a partial lifting of containment measures. As a result of the general increases in the December 2020 sales volumes, the general level of retail sales was only slightly lower in December than in February, i.e. the month before the outbreak of the crisis. In January, however, a large part of this recovery was lost again. While sales increased again in February, the general sales level in the EU was not yet recovered. With the increase of sales in March, however, the pre-crisis level of sales was reached again and even surpassed. Total retail sales are now at a level of 101.6 % of the pre-crisis February 2020 level. Naturally, non-food sales showed greater volatility than the sales of food, drinks, and tobacco. Sales of non-food articles dropped relatively sharply at the end of 2020 but increased dynamically in February and March 2021. Food sales remained relatively constant. The sale of automotive fuel was most strongly affected by the crisis and the numerous containment measures such as lockdowns and restrictions of personal contacts. The sale of fuel dropped dramatically in March (-25.7 %) and April 2020 (-31.4 %). During the summer of 2020, sales recovered somewhat but dropped again in autumn. Currently the sales level is only at 87.1 % of the February 2020 level.

Figure 1 also 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 (and also during more recent lock-downs since November 2020), they saw an increase in sales in March 2020. However, sales went back to more normal levels in the following months. The measures taken in recent months did not significantly affect the sales levels of supermarkets. Unlike in spring, when panic-buying increased supermarket turnover, their sales have remained relatively stable in recent months. The sales level in supermarkets is now 3.5 % higher than before the crisis.

Department stores, which were closed in many countries, experienced a decline that was partly compensated when the Covid-19 measures were eased in May and June but sales have not yet returned to the former levels. The closing of many non-essential shops in January 2021 strongly affected the sales in department stores in the EU. The sales level is now still more than 10 % lower than before the crisis.

Internet sales had already been on the increase for several years. The Covid-19 crisis further boosted this trend and sales via this channel increased quite dynamically in April and May. As shops reopened in European countries, the development of internet sales was somewhat curbed in June and July. Internet sales vary somewhat from month to month but it appears now that after some stagnation in late 2020 they are not on the increase again (note that the index for internet sales is much higher than for other modes of sales; the index is therefore depicted on the right hand axis.)

Table 1 shows the month-on-month growth rates according to product groups and mode of sales for the months from March 2020 to March 2021, as well as the rates for the crisis months from February and April and the rates for the recovery phase and general recovery phase between April 2020 and March 2021. The last column, entitled “recovery”, indicates the relation between the recent March 2021 level of the retail trade volume and its February 2020 level (when comparing the recovery levels for different product groups, please note that the individual series are seasonally adjusted separately and that therefore the levels do not simply add up to the total.)

Table 1: EU, development of retail trade volume during the Covid-19 crisis, monthly data, seasonally adjusted.
Source: Eurostat (sts_trtu_m)

For comparison, Figure 2 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 an average of 100). Generally, the sales of food products remain relatively stable during the year. For the sale of non-food products there was an average increase recorded during the past years. As Figure 2 indicates, the changes from one month to the next are usually around one index point; the magnitude of the declines and increases in the first half of 2020 is quite unprecedented.

Figure 2: EU, average monthly development of retail trade volume, 2010 - 2019, monthly data, seasonally adjusted.
Source: Eurostat (sts_trtu_m)

Comparison with 2008

The global financial crisis in 2008 had a dramatic effect 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 January 2009, the total retail volume index for the EU dropped by 2.2 index points, compared with a drop of almost 22 points in March and April 2020. The strongest decline in 2008 was measured for automotive fuel (-4.3 points), the index for non-food products (except fuel) dropped by 2.8 points and the index for food, drinks, and tobacco by 1.7 points. Declines in 2020 were much steeper. In April 2020 compared with two months earlier, the index for automotive fuel decreased by around 46 points, the index for other non-food products by 35 points. At the same time, the mail orders and internet volume increased by more than 30 index points.

Figure 3: EU, development of retail trade volume during the global financial crisis 2008, monthly data, seasonally adjusted (2015=100).
Source: Eurostat (sts_trtu_m)

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 2020 and March 2021, as well as the rates between February 2020 and April 2020 (the peak months of the crisis) and April 2020 and February 2021 (generally the months of recovery). The table also includes the ratio between the March 2021 index levels and the 2020 February levels (“recovery”).

In December quite a number of countries had already regained or almost regained the sales level of February. With the reinforced containment measures in January 2021 this development was partly reversed. With the increases in February and March most of the recovery was regained.

Two thirds of the countries for which data are available have regained or surpassed the sales level of February 2020 (Belgium, Denmark, Germany, Estonia, Ireland, France, Croatia, Lithuania, Luxembourg, the Netherlands, Austria, Poland, Romania, Slovenia, Finland, Sweden). Most of the other countries are now at least at a level of around 95 % of the pre-crisis sales. Only in Portugal and Slovakia are sales still around 10% lower than in February 2020. As the development over the last months shows, however, the order of the countries that regain or come close to the 2020 February level changes from month to month.

Table 2: Retail trade volume, rates of change and degree of normalisation ( recovery ) (%)
Source: Eurostat (sts_trtu_m)



Data sources

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.

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