Page 40 - BNE_magazine_06_2020 Growers

40 I Central Europe bne June 2020
CENTRAL AND EASTERN EUROPE (CEE)
The latest data for Central and Southeast Europe is for March, during which strict lockdowns including closure of all but essential shops were imposed. This shows a mixed picture from the slump
in sales in several countries, to only
a modest decline or even an increase in others where panic buying of food, medicines and cleaning products outweighed the fall in purchases of other items.
Poland
The region’s largest economy Poland saw one of the steepest declines in retail sales, which dropped 9% y/y in constant prices in March, the statistics office GUS said on April 21. The reading was the weakest since 2005.
March was the first month to picture in hard data the expected crash in retail sales after Poland closed most of its retail early that month as one of the means to curb the spread of the coronavirus (COVID-19) epidemic.
With the lockdown tightened in April and layoffs from industries such as hotels and restaurants running into tens of thousands at least, demand for goods is likely to fall further.
“The collapse in the Polish activity data for March came on the back of two strong months and suggests
in April as limitations were valid throughout the whole month and the figure could go down as much as 20%- 30% y/y,” Erste wrote.
Most retail segments saw sales crash in y/y terms in constant prices in March, GUS data showed. Sales of textiles, clothing and shoes collapsed 49.6%
y/y, clearly an effect of the government ordering the closure of shopping malls as potential coronavirus outbreak points.
Car sales declined 30.9% y/y, while sales of domestic appliances fell 16.7% in annual terms. Sales of fuels were also hit, dropping 12.5% y/y. Sales of press and books retreated 21.4% y/y.
The only segments to record turnover growth were food, in which growth came in at 2.5%, driven by the run on the grocery stores that occurred before the lockdown. Sales of pharmaceuticals and cosmetics also expanded, at 8.8% y/y.
In monthly terms, retail sales declined 3.3% in constant prices in March after inching up 0.4% month on month in February.
Czech Republic
Czech retail sales, adjusted for calendar effects, decreased by an even steeper 9.3% y/y in March, due to restrictions related to the coronavirus
closed in the second half of March, sales of non-food items fell by 17% y/y. Restrictions did not apply to grocery and pharmaceutical shops, where
sales increased above the 2019
average due to some stockpiling,” commented ING chief economist Jakub Seidler.
The overall decline came despite a 3.2% m/m increase in food sales, which failed to offset a 22.7% fall in non-food sales and a 15.8% drop for automotive fuel.
And analysts say the data for April will be even worse: “The March statistics reflect the closure of shops in just the second half of the month, while April was affected almost entirely. Although today's figures reveal the intensity of the economic slowdown due to restrictive measures against the spread of COVID-19, May's figures will be more significant, showing how fast
the economy is returning to normal,” Seidler added.
Hungary
In Hungary retail sales grew 4.4% y/y in March, slowing from a 10.9% increase in the previous month as household spending eased off after
a massive buying frenzy in late February, according to data released by the Central Statistics Office (KSH) on May 6. The adjusted data showed a 3.5% growth.
In absolute terms, retail sales came to HUF1 trillion (€2.8bn) in March. Food sales accounted for 51% of the total, non-food sales for more than 36%
and vehicle fuel sales for 13%. Mail order and internet retail sales came to HUF82bn, up 41% y/y. Hungarian consumers quickly switched to online delivery after the state of emergency and stay-at-home orders from mid- March. Online retail only accounts for 8% of retail sales.
Hungary’s retail sector weathered the first month of the pandemic well, analysts said, adding that the impact of the epidemic will be better seen in the April data. Analysts are expecting
“Most retail segments saw sales crash in y/y terms in constant prices in March”
that the economy probably avoided
a contraction in Q1 and grew at around 2% y/y. But the slump in March is
a taste of things to come, with the April data likely to be even worse as lockdown measures bite,” Capital Economics wrote in a comment.
“We expect that the effect of lockdown on retail sales will be much stronger
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outbreak, according to data published by the Czech Statistics Office (CSO) on May 6. In monthly terms, the seasonally adjusted retail sales fell
by 12.2%.
“As expected, sales in the Czech Republic fell significantly in March
due to preventive measures against the COVID-19 outbreak. As most shops were