Further development in retail will be slow and sporadic

The retail turnover in April, excluding seasonal factors, dropped 0.4% compared to March. This small drop is accounted for by a correspondingly small deterioration in the mood indicator of the population (by 3.1%) as well as by the high base determined by the rapid retail growth observed in March. Excluding fuel sales from the retail turnover, sales volumes retained their March level. In automobile sales, which are not included in the retail turnover data, growth was 2.9% in April. Including this impact, an overall increase 0.2% was observed in trade in April.

The positive developments in employment and money amount increases registered in April are not directly reflected in retail indicators. In April, for the first time in two years, the number of registered employment seekers decreased; a record number of unemployed, 8.0 thousand, found permanent employment; an increase in registered vacancies was likewise observed. The tax revenue statistics confirmed a rise in expenditure. Since retail trade accounts for an average of 250 - 280 million lats monthly turnover, the payments of deferred pensions in the amount of 80 million lats previously was considered an important factor that could act to increase sales volumes even if a fraction of it entered retail trade.  

We can conclude that after a rise in optimism at the beginning of the year currently the population remains cautious and is in no hurry to spend their additional income on everyday consumer goods, saving money for utilities or other payments in autumn. For this reason, the recovery of retail trade is going to be slow and sporadic also in the future and we are likely to observe both rises and drops in retail volumes in the coming months.