Retail sales drop 3.7% in July due to tourism paralysis



Retail sales remain in the doldrums despite the reopening of stores. According to the data released today by the INE, in July, first full month with no alarm, sector sales fell 3.7% compared to the same month last year, four tenths more than in June. The lower arrival of international tourists and the lower dynamism in terms of geographical mobility due to the pandemic were the causes of this decline. In fact, it is the fifth month in a row that this statistic has returned negative data.

In the accumulated of the year, the sales of the retail trade suffer a 9.5% crash. It should be remembered that the confinement caused this statistic to fall by 14.7% in March, while in April the decrease was greater, 31.5%. In May, sales were 20.1% less than the previous year, while in June, taking advantage of the fact that the store could open with severe restrictions, sales suffered a lesser fall, of 3.3%. The pandemic only allowed essential businesses to physically operate, so many could only sell online. In addition, consumer confidence fell to 2012 levels due to the crisis.

With respect to the month of June, sales for the seventh month of the year did grow by 1.1%, after discounting the calendar effects. Despite this, they are 16 points less than what was registered in the previous month. The end of the alarm state has led to a greater dynamism in small businesses, with growth of 2.8% in single-location companies and 3.1% in small chains. On the downside, large chains and department stores fell 1.2% and 0.9%, respectively.

Also noteworthy is the large increase in sales that service stations have had in July compared to June, 16.9%. From Statistics they attribute this increase to the end of the state of alarm and the possibility of moving throughout the country. However, service stations are being seriously affected by the maintenance of teleworking in companies and the lower arrival of international tourists, since sales in the seventh month of the year were 9.9% less than those registered one year before.

Another consequence of the "new normal" is that trade online fell 25.7% compared to June. Even so, it maintains its strong annual growth, since compared to July 2019, sales rose 19.9%.

Steep decline in the islands

By region, the month of July of this year has brought a very different panorama to other years due to the pandemic. Thus, the communities most dependent on tourism have suffered very severe setbacks compared to last year. The Balearic Islands and the Canary Islands are the most affected, with falls of 14.8% and 13.2%. In Catalonia and Andalusia the decreases were 5.5% and 5.1%. In contrast, only five communities had increases: Asturias (2.3%), La Rioja (1.9%), Basque Country (1.9%), Castilla La Mancha (0.8%) and Galicia (0, 5%).

Regarding employment, the sector continues to suffer the consequences of the crisis. In July, the month in which the summer sales begin, employment fell in all autonomous communities. In general, in July there were 3.6% fewer employed persons than in 2019, while the average for so far this year registers a drop of 1.8%. As with sales, the islands were the most affected by the health crisis. Thus, in the Balearic Islands there were 11.4% fewer employed persons in July than last year, while in the Canary Islands this decrease was 5.8%.

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