Retail sales in Romania plunge by 19.5% in April

Retail sales in Romania plunged by 19.5% in April compared to the same month last year, the statistics office INS announced.

The closure of non-essential shops in commercial centers and the movement restrictions for the population have contributed to this decline.

The sales of footwear and clothing suffered the steepest plunge - 83.5%.

Food sales contracted by 4.7% year-on-year. The panic that pushed food sales up 17.7% year-on-year in March dissipated in April as the retail chains showed their capacity to offer a steady supply of necessary goods.

Non-food sales plunged by 22.8%, as the households abandoned the purchase of non-essential products such as footwear and clothing. Buyers were also more cautious due to lower or uncertain incomes. The sales of household goods (furniture, electronics) dropped by 25.2%.

The online sales, reported by INS as part of non-food sales (although this might not always be the case) surged by 75% year-on-year as the online retailers capitalized on the movement restrictions and offline retailers quickly adapted to the situation and boosted their online capabilities. As online sales are reported as a whole, their quick rise might mean the declines in other sectors (clothing, food) might have been smaller - part of them moving online where INS is not yet providing detailed data.

The sales of car fuels, accounted separately from the food and non-food goods, dropped by 38.4% year-on-year, a lower than expected contraction given the strict movement constraints enforced in April.

Banca Transilvania’s chief economist says he expects the retail sales to strengthen in the third quarter of the year in line with the lifting of the sanitary restrictions. For the period 2020-2022, Banca Transilvania forecasts an increase in private consumption with an average annual rate of 3.5%, supported by the relaunch of investment flows (with a positive impact on the labor market) and the low level of real financing costs.

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