In the past few months, countries around Europe have been emerging from their coronavirus-imposed lockdowns. As they’ve done so, shoppers have returned to spending.
In May, total retail trade jumped 17.8% in the Euro area of 19 countries compared to the month before, according to official statistics released last week. Business could only increase from the plunge recorded in April, and the news was tempered by the reality that retail trade remained down about 5% versus the same time last year.
But some forecasters have taken it as reason to be hopeful about the prospects for economic recovery in Europe. Holger Schmieding, chief economist of Germany’s Berenberg Bank, told the New York Times the consumer rebound has been stronger than expected. He revised his forecast for the second quarter to be less bad, if not actually good.
The return of retail hasn’t been distributed evenly. Germany, which began to reopen in April, has seen sales growing strongly. The UK, on the other hand, only started its reopening in June, though early indications are positive. Shoppers may also exude different levels of comfort and confidence with their spending based on how successful their country has been containing the disease. Retail data from the OECD shows that while sales are on the mend generally some countries have more ground to make up than others in returning to pre-pandemic levels.
Still, despite the occasional coronavirus hotspots and examples such as Sweden, where the refusal to impose a lockdown has been linked to continuing problems with Covid-19, the overall trend around Europe has been positive with regard to controlling the outbreak.
That has put it in contrast with the US, where cases of Covid-19 are still surging and hopes of a quick economic recovery are fizzling. The US recorded its own retail sales bump in May, though it’s far from certain whether the trend will continue with Covid-19 cases spiking in multiple southern states and California reversing course on its reopening.
One thing Europe, the US, and other countries share in common is that how their retail recoveries proceed will depend largely on how well they keep Covid-19 under control. Analysts believe measures such as mask mandates can even have measurable economic impacts. It’s little wonder, then, that some big retailers in the US are pushing customers to wear masks in their stores.