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Among the retail product groups in Latvia, a sharp increase was shown in September this year, and the largest contribution to the overall growth of trade was provided by automotive fuel, with its annual sales increasing by 13.4%. Fuel trade has been growing strongly since the beginning of the summer, driven by falling prices as a result of falling oil prices.
In September, sales of other non-food products increased by 3.5% year-on-year, driven by strong growth in sales of household electrical goods, pharmaceuticals and medical supplies, as well as watches, jewelery and new goods nec. Meanwhile, retail sales of clothing and footwear, retail sale via mail order houses or via Internet shops and retail sale of second-hand goods decreased.
Retail sales in grocery stores in September were 5.3% higher than a year ago, providing a significant contribution to the overall sales result, given the high share of this retail category (40%).
As shown Bank of Latvia According to data, household savings continued to increase in September – compared to September of the previous year, household deposits attracted by Latvian commercial banks increased by 11.7%, reaching 7.92 billion euros. Although long-term deposits (over two years) and deposits redeemable at notice have declined, the increase in total deposits was driven by an increase in end-of-day bank balances, which account for the vast majority or 85% of all household deposits. This indicates an increase in the resources available to the population that could be diverted to consumption. However, given the caution and uncertainty surrounding their future financial situation as a result of the Covid-19 crisis, citizens are choosing to save their free financial resources, as evidenced by the Consumer Economic Confidence Index.
Faster savings are also linked to limited spending on services, such as the Covid-19 crisis, which reduces the frequency of people attending cultural events, restaurants, virtually no use of air services, etc. Given the rapid rise in Covid-19 morbidity in recent weeks, The dynamics of private consumption development will be negatively affected by the declining performance of the service sectors. Meanwhile, retail trends will be determined by the stringency of the measures taken to limit the spread of Covid-19.
The retail dynamics of the other Baltic countries in recent months have also shown a stable recovery from the Covid-19 crisis. For example, in Lithuania, in the worst month of the Covid-19 crisis – April – retail sales suffered twice as hard as in Latvia, showing a decline of 18%, but since June the industry’s growth in Lithuania has been stronger, with growth rates fluctuating between 5-8%. Thus, in nine months, retail sales in Lithuania together show similar growth as in Latvia, amounting to 1.8%. In Estonia, too, the 13% drop in April was offset by higher sales in the summer months, with the industry showing an increase of 2.2% in eight months. In the European Union (EU) as a whole, the recovery in trade is slower. Although retail sales in the EU have been growing moderately since June, the sector has continued to decline by 2.1% in eight months.
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