The total turnover of retail companies in actual prices increased by 24.3% in October 2022 when compared with October 2021. However, because of the rapid price growth, the growth in actual prices was only 5.7%, explains analyst of Latvia’s Ministry of Economics Ieva Šnīdere.
Additionally, when looking at data for October, it is necessary to keep in mind that the more rapid growth was dictated by the low base observed in October 2021. Then there are the tight trade restrictions that remained in force for a third of the month, as food stores were the ones that were open most of the time. High prices also actively slow down the growth of retain trade turnover. Over the course of the year retail trade turnover experienced a very rapid rise in non-food groups. A slower increase was observed for fuel retail turnover. Turnover went down for food products.
According to the analyst, retail trade turnover will have grown more rapidly in November as well, considering the fact that last November there were many trade restrictions in place. Nevertheless, retail trade remains affected by the high price level. Residents will spend more on necessities (food and utilities), leaving less money to spend on non-essential goods and any major purchases residents may have planned.
State support provided to residents to help cover heating costs during the heating season will help dampen the negative impact on retail trade turnover. On top of that, pension indexation was performed in September. Wages were increased, and other measures were implemented to help improve residents’ purchasing power, said Šnīdere.
In October the turnover of non-food products increased by 15.3%, securing the biggest contribution to the growth.
The most rapid turnover growth was observed for clothes, footwear and leather products (by 49%), metal products, tools, building materials and plumbing appliances (by 40.4%), sports inventory and games (by 38.9%), as well as books, newspapers, office products, audio and video records (by 28.5%).
But let’s not forged, says the ministry’s analyst, that these sectors were impacted the most by the tight restrictions that were imposed to curb Covid-19 infections in October 2021. A 20.7% increase was observed for sales of information and communication technologies. Sales in specialised electronics stores increased by 19.2%. After a drop in previous months there was an increase in retail sales of textiles, rugs, wallpapers, furniture, lighting equipment and other household utensils (by 12.6%), cosmetics and toiletries (by 8.4%), as well as clocks, jewellery and uncategorised goods (by 0.7%).
The most rapid retail turnover drop was observed for sales of flowers, plants, seeds, fertilizers, pets and their feed (by 13%). The drop continued for the fourth consecutive month. Turnover drop in sales of pharmaceutical and medical goods continued for the second consecutive month (by 4.4%).
Retail trade drop was observed for all stores outside shopping malls in October.
The most rapid drop was for retail trade outside stores, stands and markets (by 25.5%). Online shopping suffered another drop after slight growth in September (by 6.4%).
Retail turnover of food products went down for the first month since September 2021 and was 4.6% lower in October when compared with the same month of the previous year. Fuel retail trade turnover has been on a rise these last couple of months. In October there was a 3.6% increase when compared with the same month of 2021. This was largely due to the drop in fuel prices after a rapid price rise observed earlier this year.
Generally in ten months of 2022 retail trade turnover was 4.2% higher than it was in January-October of 2021. Retail trade turnover of non-food products increased by 8.4%. It was largely dictated by low base observed at the beginning of the year and October, when trade restrictions were in place and retail trade turnover suffered a considerable drop. Food product trade increased by 1.4%, whereas fuel retail trade dropped by 0.4%.
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