SANTA CRUZ DE TENERIFE, Aug. 3 (EUROPE PRESS) –
Retail sales on the islands continued to grow during the second quarter of the year compared to the same quarter of 2021, registering a positive variation of 10.6%, 8.6% above the national average variation (2%).
All the months registered a positive variation, although a slowdown trend in the growth rate can also be seen when seeing the evolution, going from an interannual growth of 14.6% in April to 10.2% in May and to be below double digits with 7.2% in the month of June.
For the vice president of the Santa Cruz de Tenerife Chamber of Commerce and president of the Internal Trade Commission, Victoria Gonzalez, the data shows a positive balance during the first half of the year, with sales growing by 9% from January to June 2022 compared to the same period of 2021, the most positive of the entire national territory compared to a growth of only 0.9% for the country as a whole.
“The good behavior of tourist activity during the months of April to June compared to the same months of 2021 is the main cause of this annual recovery in sales. However, the slowdown in growth rates as the year progresses and the foreseeable drop in consumption due to the general rise in prices that we are experiencing will make a dent in the purchasing power of Canarian families and that of the tourists who visit us, with negative consequences for the sector during the second half of the year,” said Gonzalez.
In this sense, the cameral institution points to the need for anticipation to curb, as far as possible, the expected impacts on consumption, once again pointing out necessary measures that the commercial sector has been demanding for a long time, such as the establishment of a agile return of the IGIC on purchases made by non-EU tourists as a measure to encourage consumption.
Likewise, González concluded, “we continue to hope that the Government advances in the elimination of the tax exemption for imports of less than €150, as is the case in the European Union, including the rest of the national territory, a situation that prevents local businesses from competing under equal conditions and that, despite having announced the removal of this measure, it has not yet materialized, leaving the vast majority of commercial businesses in the Islands at a disadvantage”.
For his part, from Cajasiete its director of Institutional Relations and Communication, José Manuel Garrido, indicated that “from the entity we are concerned about the symptoms of a slowdown in the rate of growth that we have been observing in recent months. These data, together with a scenario of high inflation, the rise in interest rates and general uncertainty that is beginning to discount lower business confidence, in addition to the decrease in household disposable income and the liquidity of companies and the self-employed who are already with quite tight balance figures and in a scenario still recovering from the crisis caused by the pandemic that has not yet reached the figures for 2019. The tourism sector, due to its weight in the Canarian economy, is going to play a key role in this last part of the year in order to slow down the decrease in the figures of the commercial sector.It will also be necessary to anticipate all the specific aid measures so they can help cushion the slowdown.”
Both representatives highlighted in their speech the importance of not losing the ground gained during the last year after the negative impact that the pandemic has left on the productive fabric and employment in the sector, from which it has not yet recovered. In fact, in the Canary Islands in June there were a total of 13,948 companies registered with Social Security with a worker in their charge in commercial activities, including vehicle repair. A figure that represents an annual increase of 1.1%, 151 more companies than in June 2021, mainly due to the increase in retail businesses (98), since wholesalers and motor vehicle repair grew less measure, 50 and 3 more companies respectively. If we compare them with the number of companies prior to the pandemic, it can be seen that the recovery is still incomplete with 912 fewer than at the end of 2019.
Looking at the indicators referring to the labor market, a significant recovery in employment can also be seen. The Retail Trade Occupancy Index, prepared by the INE, maintains in the second quarter the positive variation that began at the end of 2021 and shows an increase of 4.4% compared to the same quarter of last year, being also 2.1 points higher to the national (2.3%).
Similarly, the average number of Social Security affiliates in the branch of commercial activity during the second quarter recorded a significant increase of 4.6% over the figure for the previous year. As of June 30, the number of affiliations of the Canarian trade reached 154,709, a figure that represents 6,571 more affiliates than a year ago, but 3,706 below those existing in February 2020, just before the pandemic.
On the other hand, the number of unemployed registered in the employment offices, the average for the second quarter accentuates the decrease that began in 2021 (-29.3%). At the end of June there were 31,383 registered unemployed belonging to the commercial sector, 13,200 less than a year ago.
THE CLIMB IN PRICES PUT THE RECOVERY AT RISK
There is no doubt that inflation, which will be more persistent than expected, will affect the consumption capacity of families and tourists, which will translate into a moderation in sales during the summer months and especially in the last quarter of the year where we will have to wait to see whether or not the trade manages to maintain the figures of the 2021 Christmas campaign, the first recovery after COVID-19.
The rise in the cost of fuel and fuel, and especially energy, is being transferred to the set of goods and services in the shopping basket, as reflected month by month by the rise in underlying inflation. Looking at some of the groups, we can see how “Food and non-alcoholic beverages” experienced an annual increase of 13.3% in June in the Canary Islands, 0.4 points higher than the national average (12.9%); that of “Alcoholic beverages and tobacco” increased by 3.1% compared to June 2021, while at the national level it rose by 4.1%; the group of “Clothing and footwear” fell by 2.6% in the Islands and increased by 2.4% at the national level and that of “Furniture, household items and items for routine household maintenance” recorded an increase in Islands of 6% and 6.5% at the national level.
At the moment, the Business Confidence Indicator shows a positive behavior, growing by 5.8% in the survey carried out in July. The balance of the situation or difference between the favorable and unfavorable answers on the behavior of the activity during the second quarter of the year showed a negative value with a higher percentage of companies stating that they had reduced their activity (25%), something normal after the season of Kings and rebates, than those that experienced increases (23%). Looking ahead to the summer, the percentage of companies that foresee a favorable evolution increases to 25.7%, and that which estimates a worsening of activity (26.2%) also increases, although to a lesser extent. The balance of expectations considerably cuts the negativity that has been recorded since the beginning of 2019 and stands at only -0.5%.
