Shoppers fall in August – chief economists agree on what is the reason

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After several months of solid growth in the retail trade as a result of the corona, there was a marked drop in shopping in August.

Statistics Norway’s retail sales index for the previous month showed a decline of as much as 4.9 per cent.

– We see this more as a correction after very high levels this summer, and not as the start of a correction driven by uncertainty, says chief economist Frank Jullum in Danske Bank.

According to estimates obtained by TDN Direkt, a fall of 2.4 per cent on average on a monthly basis was expected in advance. However, there were large gaps in the estimates from the five brokerage houses in the survey.

“June and July were extreme”

Nordea Markets chief economist Kjetil Olsen points out that the current level is still around ten percent higher than it was in February – before the corona.

He points out that the levels this summer were extreme, much due to the fact that many stayed at home on Norwegian holidays.

– It was a little surprising that it was so much down in August, and the figures we have do not indicate such large fluctuations. It must be a summer holiday effect, as the levels in June and July were extreme, and now it looks as if it may be about to normalize, Olsen says.

He receives support from chief economist Jullum at Danske Bank, who also emphasizes the strong increase through the corona. Danske Bank itself expected a fall of two per cent in August.

He points out that nothing dramatic has happened on the income side that would indicate that Norwegians have snagged their wallets. In addition, Norwegians have also saved a lot since March, the chief economist points out.

– It would have been reasonable to believe that this could mean that people became more careful as a result of the boom we have seen after the summer, but I do not think so. We come from a high level, says Jullum.

Decline for most

According to the recent report, the decline was widespread in most industries. However, the biggest contributions to the decline came from grocery stores, sports stores and furniture stores.

“Despite the decline, however, sales volume is still significantly higher than before the Corona pandemic hit Norway. The pandemic and associated restrictions have contributed to Norwegians in recent months turning their consumption in the direction of spending less money on the purchase of services, and more on consumption of goods “, Statistics Norway writes in a press release.

These fell by 23 per cent, while retail trade in ICT equipment accounted for the second steepest fall of 10.7 per cent.

“Clothing stores and electronics stores, however, also had a reduced sales volume this month. The only industry that experienced noticeable growth in August was retail trade in pharmacy goods, which helped to curb the decline in the total index somewhat, »the agency writes.

Rise sharply below the corona

Monday’s shopping numbers come after a surprising increase in the previous period, from June to July. At that time, the retail sales index rose by 0.6 per cent, compared with an expected fall of 0.3 per cent.

When the corona pandemic reached Norway, and the country was partially shut down, a sharp decline in retail sales was expected. When the figures were clear, however, it emerged that the fall was a moderate 0.9 percent. Here, “hoarding” and online shopping became important factors that helped to curb the fall.

Since March, retail trade has picked up sharply. In April, Norwegians shopped for 4.8 per cent more than in March, and in May retail sales increased by 2.8 per cent.

In June, a slight increase of 0.2 per cent was expected, while the result was completely different. The retail sales index soared, ending 5.7 percent from May to June.(Terms)Copyright Dagens Næringsliv AS and / or our suppliers. We would like you to share our cases using a link, which leads directly to our pages. Copying or other form of use of all or part of the content, can only take place with written permission or as permitted by law. For further terms see here.

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