Impact of Covid-19 crisis on retail trade

Data from January 2022

No planned article update

Highlights

In January 2022, total EU retail sales increased by 0.6 % compared with December 2021; sales of food increased by 0.2 %, sales of non-food by 1.0 %, while sales of automotive fuels decreased by 1.1 %.

The total EU retail sales volume in January 2022 is 4.1 % higher than in February 2020, the month preceding the Covid-19 crisis.

EU, development of retail trade volume, 2020 – 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 4 March 2022.

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 2020. 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.

Since March 2021, many measures have gradually been lifted. In general, the strictness, lengths and nature of the Covid-19 measures in the EU is relatively heterogeneous. In early 2022, many measures were further reduced or even phased out. 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 January 2022

Retail trade in January 2022 increased by 0.6 % after a decrease of 2.6 % in December 2021 and increases of 1.1 % in November 2021 and 0.4 % in October 2021. In the euro-area, the monthly decrease in January 2022 compared with December 2021 was only 0.2 %. The overall growth pattern in the euro area and the EU are, in general, relatively similar.

Compared with January 2021, there was an increase in the retail trade volume of 8.3 % in the EU and of 7.8 % 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 in 2020 and 2021 for total retail trade, for food and non-food products and according to the mode of sale. Note that internet sales are measured on the right-hand scale because of their comparatively fast development.

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, 2020 – 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 and sudden impact on retail trade. In March and April 2020, the total retail trade volume dropped by 9.2 % 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 generally picked up again and the sales levels approached or even surpassed (non-food articles) the pre-crisis volumes. In the following months, sales of food, drinks and tobacco remained relatively stable which also corresponds with the relatively stable sales in supermarkets.

The sales of non-food products increased in autumn 2020 but then went down again during the winter, possibly as a result of more restrictive Covid-19 measures. The sales in department stores developed in a similar way but the ups and downs were even more pronounced.

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 (-23.1 %) and April 2020 (-25.7 %). During the summer of 2020, sales recovered somewhat but dropped again in autumn. Currently the sales level is only at 97.1 % of the February 2020 level. The sales level of fuel in gas stations is the only product group that has not yet regained the pre-crisis level.

Figure 1 also indicates the levels of internet sales (right-hand axis). 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 2020. As shops reopened in European countries, the development of internet sales was somewhat curbed during the summer but increased again in autumn and winter 2020. In the summer of 2021, internet sales dropped again and have since then remained on a rather high level (more than 30 % higher than before the Covid-19 crisis.)

Table 1 shows the month-on-month growth rates according to product groups and mode of sales for the months since March 2020, as well as the rates for the crisis months from February and April and the rates for the recovery phase between April 2020 and January 2022. The last column, entitled “recovery”, indicates the relation between the recent January 2022 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, March 2020 - January 2022.
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 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 (-4.4 points), the index for non-food products (except fuel) dropped by 2.9 points and the index for food, drinks, and tobacco by 1.7 points. Declines in spring 2020 were much steeper. In April 2020 compared with two months earlier, the index for automotive fuel decreased by 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 January 2022, as well as the rates between February 2020 and April 2020 (the peak months of the crisis) and April 2020 and January 2022 (the months of recovery until now). The table also includes the ratio between the January 2022 index levels and the 2020 February levels (“recovery”).

On average the EU level of retail trade dropped within two months (March and April 2020) to around 80 % of the February 2020 pre-crisis level. In a number of countries (e.g. Belgium, Denmark, Germany, the Netherlands, Austria, Finland) the drop was moderate, recovery was relatively swift and pre-crisis levels were already surpassed in May 2020. Several other countries were hit more severely (France, Italy, Cyprus, Luxembourg) and the recovery took longer. The EU and the euro area regained the pre-crisis level again in August 2020.

In the following months the recovery process continued except for a setback in January and February 2021 which was, however, not very severe compared with what had happened in the first months of the crisis. In January 2022, all EU countries, with the exception of Portugal and Slovakia, had regained or even clearly surpassed the sales levels of February 2020.

Table 2: Retail trade volume, rates of change and degree of normalisation (recovery), March 2020 - January 2022, (%)
Source: Eurostat (sts_trtu_m)

Source data for tables and graphs

Impact of Covid-19 crisis on short-term business statistics: tables and figures

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.