Johanna Linda Pihlak, analyst at Statistics Estonia, said that while the turnover volume in March was down by 4 percent compared to the same time last year, the decline slowed somewhat in April. "The drop in the volume of retail trade turnover in April was mainly due to grocery stores, as their turnover volume decreased by 6 percent year on year," Pihlak added.

Compared with April 2023, the turnover volume of stores selling manufactured goods decreased by 5 percent. The biggest decline, by 12 percent, was registered in stores selling household goods and appliances, hardware and building materials. A larger-than-average fall of 11 percent was also recorded in stores selling textiles, clothing and footwear, and in stores selling via mail order or the internet, where the turnover volume was down by 9 percent. In pharmacies and stores selling cosmetics, the volume of turnover increased by 7 percent and a 2 percent rise was seen in other specialized stores selling predominantly computers and their accessories, books, sports equipment, games, toys etc.

The turnover volume of enterprises engaged in the retail sale of automotive fuel increased by 9 percent compared with April last year.

In comparison with March, the volume of retail trade turnover decreased by 2 percent in April. According to the seasonally and working-day adjusted data, turnover volume was down by 1 percent from the previous month.

In the first four months of 2024, the turnover of retail trade enterprises decreased by 4 percent compared with the same period of 2023.

Economist: families looking for ways to save

Lenno Uusküla, chief economist at Luminor, commented on the decline in sales volumes of retail businesses, noting that while it stabilized last year, the volumes fell significantly in the first quarter of this year. "The first quarter's sales were 1.9 percent lower than the fourth quarter's sales when looking at volumes excluding cars, and as much as 5.4 percent lower when including cars. This was largely due to the impact of the VAT increase, as the volume indices decreased by about the same amount as the VAT hike," he said.

"There are two important and significant product groups in the downward trend. Consumption of food products and durable goods continues to decline," Uusküla noted. "For durable goods, purchases can often be postponed. While food consumption should generally be less cyclical due to the stable need for consumption, Estonia has seen a 20 percent decline over the past two years, and the richness of the food table significantly depends on the economic situation."

Uusküla added that since wage growth was strong in the first quarter and exceeded the price increase, purchasing power is rising, and money is starting to accumulate again in savings as well as returning to stores. "The decline at the beginning of the year should not mark the start of a new downward trend but rather an adjustment to the changes that have occurred."

--

Follow ERR News on Facebook and Twitter and never miss an update!