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May Retail Sales Rose in Europe and Asia, But Growth Seems to be Slowing

With restrictions easing, consumers are finally making their way to stores for some retail therapy.

Data mostly indicates gains in retail sales across parts of Europe and Asia. The data reported here is all on a year-over-year basis. But even though many countries are posting upticks in retail sales, in some cases volume has started to moderate from the higher gains reported earlier in the year.

Still, retail seems to be in good shape, or at least better than in the year-ago period, though there’s still room for improvement.

In a statement Thursday, JD Sports Fashion’s executive chairman Peter Cowgill issued a business update on the British retail giant’s operations. He noted that the company now operates 3,300 stores in 29 countries after the DLTR and Marketing Investment Group acquisitions. “Substantially all of the stores are now trading although we continue to experience some temporary closures in parts of the Asia Pacific region,” he said.

“In those markets across Europe where stores were closed in the early part of the year we saw sales retention slightly ahead of that seen in the first closure period in Spring 2020,” Cowgill continued. “Trading in the immediate period after reopening was particularly encouraging in the UK as both loyal and new consumers, seeking to refresh their personal style as hospitality and workplaces began to reopen, reacted positively to JD’s innovative and exciting product mix. Consistent with other retailers, store footfall remains fragile with online traffic at elevated levels.”

On Monday, JD Sports said its Iberian Sports Retail Group SL has inked a deal to acquire an 80 percent stake in Deporvillage SL for 140.4 million euros ($166.8 million), of which 40.4 million euros ($48.0 million) will be paid on a deferred basis contingent on the performance of the business through Dec. 31, 2021.

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JD Sports holds a 50.02 stake in Iberian, a holding firm based in Spain. Deporvillage is a Spanish online sporting goods retailer based in Catalonia. The sporting goods retailer has operations via country-specific websites in Italy, France, Portugal, Germany and the U.K., in addition to its home country. JD said revenues were 117.8 million euros ($139.9 million) for the year ended Dec. 31, 2020.

JD Sports said that Deporvillage’s founders, Xavier Pladellorens and Ángel Corcuera, will retain a 20 percent stake in the business and will continue in their roles as CEO and chief purchasing officer, respectively. The company has also taken a controlling interest in British upstart Oi Polloi.

Here’s how retail sales on a year-over-year basis fared in May across parts of Europe and Asia.

European retail sales

Retail sales in Denmark rose 6.4 percent, representing the third straight month of gains following the easing of lockdown restrictions. Apparel and non-food sales rose 11.5 percent. The 6.4 percent was below the 9.7 percent increase in April and far lower than the nearly 25 percent spike in March, according to data from Statistics Denmark.

Ireland’s Central Statistics Office said retail sales jumped 44.0 percent year-over-year in May, on top of an 83.4 percent gain in April. The apparel, footwear and textiles sector saw the greatest volume increases, up 462 percent, but that was from a very low base due to the pandemic.

In Latvia, retail sales climbed 3.2 percent, down from the 15.6 percent jump in April, and matching the 3.2 percent gain in March, according to the Central Statistical Bureau of Latvia.

Over in Lithuania, retail sales rose 18.8 percent in May, year-over year, down from the 36.1 percent jump in April and the 21.6 percent rise in March, but still representing the third straight month of increases.

In Norway, retail sales year-over-year rose 5.6 percent in May for the second straight month. Separately, the increase in May on a month-to-month basis at 5.8 percent represented the largest increase since January 1991. According to Statistics Norway, the largest contribution to total growth was from apparel sales. Norway is one of the few countries that posted positive retail sales for the last rolling 12 months. May’s figures were above the 2.9 percent increase in April, but below the 6.8 percent gain in March. And while February sales were up 6.1 percent, that was also below the 8.2 percent rise in January. Current data shows that retail sales for the first five months of 2021 have been below some of the increases the country posted starting in June 2020, on a rolling 12-month basis. That 2020 period also saw retail sales up nearly 14 percent in the months of June, July and November.

And in Spain, retail sales for the third straight month, up 19.6 percent in May, moderating somewhat from the record 40.5 percent spike in April. April’s jump in sales represented a jump from the 14.3 percent increase in March.

Retail volume was up 10.3 percent in Sweden, and represented the strongest rise in activity since May 2000. By category, sales of electronics and electrical appliances saw a 21 percent uptick, followed by apparel and footwear sales, which rose 22.5 percent. Online sales rose 18.1 percent for the same period, according to data from Statistics Sweden. The May increase was the highest since January, which saw sales up 2.4 percent. February sales were up 4.2 percent, while March rose 8.1 percent and April’s increase slipped to up 7 percent.

Retail sales in the U.K. rose by 24.6 percent in May, down from the 42.4 percent spike in sales in April, year-over-year. May’s figures were still higher than the 7.1 percent increase in retail sales posted for March, according to the Office for National Statistics.

Three other key trading reports for May are not yet available, but are included here for comparison purposes.

France also hasn’t yet posted May retail sales figures, but April’s report from Eurostat shows a 42.1 percent gain, year-over-year. Sales in March rose 24.9 percent, which was a spike from the 4 percent year-over-year gains posted in February. With the exception of November 2020, retail sales in France have been rising since June 2020, although the year-over-year percentage increases have only been in the single digits, according to Eurostat.

And Germany is another country that hasn’t yet posted its May retail sales data. Sales were 4.4 percent in April, but that was below the 11.6 percent increase in March. The April report saw sales of textiles, apparel, shoes and leather goods increase 33.1 percent. Over the rolling 12 months since May 2020, retail sales on a year-over year basis have been reflecting gains, except during January 2021 when it was down 8.3 percent and February, in which sales fell 6.2 percent.

Italy’s National Institute of Statistics hasn’t yet provided May’s retail sales report, but April saw a gain of 30.4 percent year-over-year, which was higher than the 23.5 percent rise in March.

Asia retail sales

In parts of Asia, retail sales have been up and remain in positive territory. However, there are early indications that perhaps retail volume might be starting to normalize within an up single-digit range versus past double-digit percent gains.

In Japan, the Ministry of Economy Trade and Industry said retail sales increased 8.2 percent year-over-year in May, versus market expectations of a 7.9 percent gain. The increase moderated from the 11.9 percent uptick in April, but higher than the 5.2 percent rise in March. The textiles, apparel and accessories category saw sales rise 16.7 percent in May, but that was down from the 63.7 percent increase in April.

In Hong Kong, retail sales in May rose 7.8 percent, according to the Census and Statistics Department, Hong Kong. Retail sales rose the most for jewelry, watches, clocks and valuable gifts, at up 49.5 percent, while apparel and footwear sales were up 10.7 percent. While the latest reading shows the fourth straight month of increases, the data  points also showed steady year-over-year decreases since February, which saw the highest gain at up 31.6 percent. Sales slowed to 19.9 percent in March, before heading lower to 11 percent in April. Retail sales from June 2020 through January 2021 all saw declines on a year-over-year basis.

A similar pattern in might be on the way in South Korea, although probably still too early to conclude that a declining trend line is in place. Data from Statistics Korea indicated that year-over-year retail sales were flat in January, but rose to 8.2 percent in February and then climbed to 10.9 percent in March. But sales fell to 8.6 percent in April, before falling again to up 3.1 percent in May.

Additional reporting by Jessica Binns.