Retail turnover continued to decline this August, still driven by high price levels. Total turnover of retail enterprises at current prices fell by 0.5% over the year, but when accounting for price impact, it decreased by 2.8% at constant prices (based on unadjusted data). A decline in retail volume is also observable on a monthly basis. In August, compared to July, it fell by 0.4% (based on seasonally adjusted data).

Year-on-year, the retail turnover of food and non-food products fell under the influence of high prices. Conversely, retail turnover of fuel remained practically at the previous year's level.

In August, the retail turnover of non-food products fell by 3.9% year-on-year. It decreased across all main non-food product groups, with the exception of the sale of clothing, footwear, and leather goods, where turnover grew by 12.3%, the sale of information and communication technology equipment (an increase of 5%), and the sale of pharmaceutical and medical goods (an increase of 0.2%). The steepest decline in turnover was in the sale of books, newspapers, stationery, and audio and video recordings (by 12.2%). Retail turnover also fell sharply in the retail sale of watches, jewellery, and new goods classified elsewhere (by 8.9%), the retail sale of sporting goods and games (by 8.6%), the retail sale of household electrical appliances in specialised stores (by 6.9%), the retail sale of hardware, tools, construction materials, and sanitary ware (by 6.9%), and the retail sale of flowers, plants, seeds, fertilisers, pets, and pet food (by 6.1%). A more moderate decline was observed in the retail sale of textiles, carpets, rugs, wallpaper, furniture, lighting equipment, and other household items (by 1.2%) and the retail sale of cosmetics and toiletries (by 0.9%).

Broken down by retail location, a sharp rise in turnover was observed in retail sales at stalls and markets (by 7.5%), while in other retail trade outside of stores, stalls, and markets, it fell sharply (by 10.6%). Meanwhile, mail order or internet retail trade saw a slight decline of 1.7%.

The retail turnover of food products fell for the eleventh consecutive month year-on-year in August, but in August, the decline was more moderate than in the previous five months – at 3.1%. The price level for food remains high, which is affecting food product turnover.

The retail turnover of fuel at petrol stations remained practically unchanged in August – increasing by 0.3% compared to August 2022. This was largely determined by the increase in fuel retail volume in August of the previous year, following the drop in fuel prices after their sharp rise in the first half of that year.

Overall, in the first eight months of this year, retail turnover was 2.4% lower than in January-August 2022, largely driven by a 5.1% drop in food retail turnover due to high food prices. Non-food retail fell by 2.6%, caused by a high base in early 2022 when all trade restrictions were gradually lifted and retail turnover increased significantly. In contrast, fuel retail turnover grew by 3.5% this January-August, influenced by lower retail volumes in April-July of the previous year due to high fuel prices.

Retail volumes will continue to be affected by high prices – residents have adjusted to making cheaper purchases and buying smaller quantities. However, as food and energy prices stabilise, their negative impact on retail turnover will gradually diminish.

The Ministry of Economics' assessment was prepared by Ieva Šnīdere, analyst at the Analytical Service

https://www.em.gov.lv/lv/jaunums/2023-gada-augusta-mazumtirdznieciba-turpinajas-kritums