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Glossary

Retail Sales

Retail sales is the activity of selling goods and providing services to the end consumer for personal use, that is, for purposes not related to entrepreneurial activity.

To assess the dynamics of retail sales, there is such an indicator as the retail sales index. The growth of the values of this index has a positive effect on the country’s GDP. The retail sales index also has an indirect effect on stock indices. An increase in the population’s income has a positive effect on the index itself, and an increase in the level of prices and unemployment in the economy has a negative effect.

The greatest attention is paid to the retail sales index in countries with a high share of household expenditures in GDP, for example, in the USA, the United Kingdom, Brazil, and Italy. This indicator is least important in developing exporting countries (for example, in China, Saudi Arabia, UAE, and Qatar), where other components of GDP have a greater influence.

The graph below shows the dynamics of the values of the retail sales index in different countries of the world.



Due to the crisis, restrictions, and lockdowns in the first half of 2020, all countries experienced a landslide decline in retail sales, as consumers could not purchase goods and services as they did in regular times.

The retail sales index can be calculated on an annual and monthly basis.

The index in annual terms (YoY) shows the change in retail turnover in comparable prices to the corresponding period of the previous or base year. In most countries, YoY retail indices are calculated by statistical agencies and central banks on a monthly basis (for example, in the United States, Russia, Austria, Estonia, Poland, Germany, Sweden, Serbia, Turkey, and Hungary). In some countries of the world, the annualized retail sales index can be calculated quarterly (in Georgia, Macau, and New Zealand) and once a year (for example, in Cuba).

The indices on a monthly basis (MoM) reflect the change in retail sales at constant prices compared to the previous month. Examples include the MoM retail indices in Belgium, Canada, Australia, the United Kingdom, Vietnam, and Greece.

In some countries, retail indices are calculated while excluding certain types of products. For example, the United States and Canada publish a monthly car-free retail index. The peculiarity lies in the fact that the number of cars sold is quite variable, so the most illustrative indicator is one that does not take into account car sales. The UK has a fuel-free retail index calculated on a monthly basis.
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