Romania’s retail sales down 1.4% y/y in August

By bne IntelliNews October 3, 2013

Romania’s retail sales volume index shrank by 1.4% y/y in August, reversing from the 1.2% y/y advance in July, the statistics office INS reported. The retail sales and generally the household consumption remain constrained by budget – but also by their caution regarding future earnings.

Rising heating expenditures this winter will predictably keep the private consumption’s dynamics in the negative territory for the quarters to come particularly as no improvement in the incomes or employment are expected.

The performance in Q3 might thus eventually remain in the negative territory after sales have narrowed slightly by 0.2% y/y in Q1 and more visibly by 1.8% y/y in Q2. The real wages have decreased marginally on the year in both Q1 and Q2, while indeed the employment improved slightly more consistently by around 3% y/y. Nonetheless, the service of the bank loans and particularly the uncertainty related to future revenues place visible pressure on household consumption.

Food sales index dropped by 2.7% y/y in August after narrowing by 0.7% y/y in July, indicating that households save on the expenses supposed to be the least elastic to wages. The sales of car fuels shrank even steeper, by 6.9% y/y, after they dropped significantly in each of the first two quarters of the year. After gaining ground in 2012 by 6.2% y/y, the car fuel sales lose ground again on consumer sentiment that has visibly deteriorated in 2013.

Retail Sales Volume Index 2010 2011 2012 Q1-13 Q2-13 Jul-13 Aug-13
Total -7.0% -1.2% 4.1% -0.1% -1.8% 1.2% -1.4%
Total, swda* q/q, m/m n.a. n.a. n.a. -1.0% -1.6% 2.3% 0.9%
A. Food stores -9.4% -6.9% 2.6% 1.7% -1.3% -0.7% -2.7%
B. Non-food stores -10.7% 4.4% 4.1% 0.6% 2.3% 4.3% 3.8%
C. Car fuel 3.3% -1.6% 6.2% -3.9% -8.5% -0.9% -6.9%
Source: INS, *seasonally and workday adjusted

Related Articles

Romania's Transgaz to open branch in Moldova to speed up pipeline construction

Romanian natural gas transport company Transgaz will soon open an office in Chisinau to speed up the construction of Ungheni-Chisinau pipeline that will bring Romanian gas to Moldova’s main ... more

Cummins reportedly to relocate production from UK to Romania after Brexit

Global engine and generators manufacturer Cummins plans to relocate production from the UK to Craiova, in southwest Romania, after Brexit, Craiova mayor ... more

Nato boosts Black Sea presence with new Romanian military force

Nato launched a new multinational force in Craiova, southern Romania, on October 9, as part of its Forward presence in the southeastern alliance states.  The move is aimed at countering ... more