March retail volumes down 0.0% m/m as EU retail stagnates

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AAs EU retail trade stagnates, the question for container trade from the Far East to Europe will be whether consumers buy less or cheaper.

The so-called Far East to Europe trade includes trade to Northern Europe as well as to countries bordering the Mediterranean and the Black Sea. In this definition of Europe, the twenty-seven countries of the European Union (EU 27) represent 55% of economic activity. Yet retail trade in the EU-27 has in the past shown a strong correlation with overall trade volumes between the Far East and Europe.

“Retail trade in the European Union has stagnated. The March figures showed no increase from February and only 1.4% growth from a year ago. In fact, over the past 11 months, retail trade has been within ±1.3% of March numbers,” says Niels Rasmussen, chief shipping analyst at BIMCO.

Despite slower average economic growth during the COVID-19 pandemic, retail trade remains 1.6% above the pre-COVID trendline forecast. This could indicate that a downward adjustment is not far away.

In fact, the EU consumer confidence reading for April showed the second lowest reading on record. Only the April 2020 reading was worse and at the time retail trade fell to the lowest level in fifteen years.

“Retail is unlikely to fall as low as April 2020 this time around, as the lockdowns so far in Europe seem to be a thing of the past,” Rasmussen says and adds “In the meantime, there are clear signs of a softening The key to container trade from the Far East to Europe will be whether consumers will simply buy less or replace more expensive items with cheaper ones, in which case volumes of containers would be less affected.
Source: BIMCO, Chief Shipping Analyst, Niels Rasmussen

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