Retail contracts again slightly in December. 2010 overall: up and down

Retail turnover (in comparative prices, seasonal effect excluded) dropped in December 1.4% month-on-month. Taking into account the deterioration in the mood of both consumers and merchants at the end of the year against the background of drafting the state budget, such a result was not unexpected. The expected rise in tax rates has apparently not been a sufficient stimulus to have a significant positive effect on December sales.

With the December retail data published we can also evaluate 2010 overall and compare the sales volumes against the lowest point of the crisis.

Looking at the year overall, we can compare the situation in trade to the patient and meek attempts by a newborn calf to get up on its four legs and take a more confident step forward. The mood of the population at the beginning of the year demonstrated fast improvement but subsequent dynamic was unstable with regular stumbles. The picture was similar concerning sales volumes: after some rapid increases at the beginning of the year there followed a very slow and uneven growth. 2010 taken as a whole ended in minuses compared to 2009 if we evaluate retail volumes excluding car sales (-2.2%).  If car sales are included, retail posts and increase (+3.3%).

Compared to the lowest crisis point in sales (December 2009), the volume of retail sales has gained 8.1% (13.8% including car sales). Over the course of the year, the sales volumes of durable goods – automobiles, furniture, household appliances, and construction materials – have increased rather substantially. By and large it indicates postponed consumption, i.e. a more active use of savings developed during the crisis.  

The retail situation in January of this year is equivocal. According to the publications by the European Community, there is a rather substantial improvement in the confidence of both consumers and merchants after the December drop. It is difficult to determine if the adoption of the budget is at the basis of this improvement: albeit not promising a rosy future because of the raise in taxes, it at least brings more clarity. Yet we can hardly be sure that the possibly positive January indicator will mark the beginning of a period of faster improvement: uncertainty regarding future prospects is still high.

APA: Rutkovska, A. (2022, 26. may.). Retail contracts again slightly in December. 2010 overall: up and down. Taken from https://www.macroeconomics.lv/node/2372
MLA: Rutkovska, Agnese. "Retail contracts again slightly in December. 2010 overall: up and down" www.macroeconomics.lv. Tīmeklis. 26.05.2022. <https://www.macroeconomics.lv/node/2372>.

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