The retail sales index in Romania (chart) contracted by 1.5% y/y in April, the worst performance since April-May 2020 when the stores were closed and mobility restricted amid the Covid-19 lockdown.

The seasonally adjusted sales index plunged by 3.7% m/m in April 2023 – again the steepest monthly decline since 2020.

Compared to other European economies, Romania’s retail sales demonstrate resilience – but this is rather because of the already low level of per capita consumption hence limited capacity to cut unnecessary expenditures.

Retail sales dropped by 2.7% y/y in Bulgaria, a moderate rate compared to the -8.6% y/y in Germany or -6.8% y/y in Sweden. Both Romania’s and Bulgaria’s sales were less hit by the drop in consumer sentiment compared to Hungary, however, where the sales plunged by 12.6% y/y in April.

Separately, the food and non-food sales in Romania posted worse performances during the past three years since the lockdown, but their combined slowdown plus sluggish car fuel sales contributed to an overall disappointing figure that is in line with expectations and with retailers’ reports about their sales and the change in the buying habits under the pressure of sustained inflation.

The wages may have increased on average in line with inflation, but the rise has not been even, and the purchasing power of some categories of households significantly declined.

Thus, the non-food sales, typically a proxi for the consumer sentiment, decreased by 1.3% y/y in April, after it surprisingly accelerated to 6.0% y/y in Q1. The seasonally-adjusted index (-2.8% m/m in April) has stagnated within a narrow band with no specific trend since the beginning of the year – after it recovered fast after the lockdown and boasted the steepest rise over the past years.

The food sales still increased by 1.5% y/y in April, a significant slowdown, however, from +7.3% y/y in Q1. In seasonally-adjusted terms, food sales dropped by 2.5% m/m in April.

iulian@romania-insider.com

(Photo source: Robbiverte/Dreamstime.com)