As of November last year retail sales in Latvia have noticeably toned down increasing in trade turnover. And February was no exception. In the reporting month it was specifically noticeable in the non-food goods segment, where the key perpetrator of slowdown was the falling-off in sales of petrol by 10%.
In February 2016 as compared with February 2015 the rates of increase in retail volumes made up just 2.3%. By way of comparison: the year before there was talk of gains by more than 9%.
As to petrol, the reasons of slowdown could be few. First, the year before the petrol trade turnover spiked against the visibly battered prices. Hence, it could be said that this year sales at fuel stations got back to the norm. Second, February 2016 was noticeably warmer than normal, and the drivers did not have to warm up their iron horses for a long time and spend extra fuel.
But February was unsuccessful not for all representatives of the non-food goods sector. If to exclude the petrol sales, then 6.1% growth was observed in the non-food goods segment. Judging by the statistics, the Latvians were lavish with buying gadgets, sporting goods and medicine.
The most noticeable jump was registered at stores dealing in equipment of information and communication technology (+22.5%), goods in the sphere of culture and recreation (+16.4%), pharmaceutical and medical supplies (+11.1%), as well as clothes, footwear and leather goods (+8.5%). Shopping on the Internet and by mail order continues gaining popularity. Increase in this trade group has grown over the year by 28.1%.
In light of the abovementioned figures it is too early for merchants to ring alarm bells – evaluation of the consumption growth this year by contrast to the last one is quite optimistic.
The final result will be influenced by the consumer sentiments. Despite the weak beginning of the year, in the subsequent months the consumptive activity of the Latvians simply must get back to the previous level.
Such forecast is based on the unfailingly favourable trends for further consumption growth in Latvia. That’s the steady growth in actual wages and macroeconomic development of the country and positive trends in the labour market.
Spending on non-food goods remains the key engine of consumption. This, to a larger degree, reflects also how consistently the residents of Latvia feel.
The retailing forecast should consider also the flow of tourists and changes in their spending power. This makes sellers to revaluate the existing offers, by shifting emphasis from the Russians to our neighbours from Lithuania and Estonia, as well as to the travellers from Western and Northern Europe.