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Sunday, December 9, 2007

Estonia Retail Sales October 2007

According to data from Statistics Estonia, in October retail sales from retail trade enterprises amounyted to 4.7 billion kroons, which in constant prices was 9% more than in October 2006. If we look at the chart we can see the slowdown since May very cleary. At this rate there is what, 4 or 5 months before the year on year rate reaches zero. And remember this collapse in domestic demand is now more or less built in, the only counter trend will be remittances from those working abroad (such as they are in the Estonian case, but they are almost certainly less than they are for Latvia or Lithuania, since the outflow of people was less). Exports are unlikely to provide much respite while the currency peg remains, since they are constrained by the uncompetitiveness of the relative pricing, especially with the very high euro values we have at the present time. So, I'm afraid, its down and down we go from here on in.

We should note however, that in month on month terms there was a slight recovery in September, since sales were actually up 3% on September, when they were down 6% on August.

In October the largest increase continued to be in stores selling manufactured goods (13%), although compared with previous months the growth rate continued its decline. The growth rate in grocery stores was also slightly less in October compared with previous months, with the increase in these stores being 6% when compared with October 2006. Due to a large their share, grocery stores were responsible for about half of the total increase in the sales of the retail trade enterprises.

Among manufactured goods the fastest growth was in specialized stores (28%), with strong demand in stores selling textiles, clothing and footwear (all of which, please note, are subject to strong competition from ex-eurozone sources), and sales in this group increased by 20% year on year. Stores selling household goods and appliances, hardware and building materials also grew by a fairly strong 13% y-o-y.

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