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Fast Comment DenmarkThe year began with weak retail sales

  1. Retail sales fell 0.3 percent m-o-m in January - close to our expectation (-0.5 percent)
  2. Sales were revised down in both November and December
  3. Consumer confidence indicates continued cautious consumers ahead
Retail sales fell in January
Retail sales fell by 0.3 percent m-o-m in January, which was close to our expectation of a 0.5 percent monthly contraction. Furthermore, sales were revised down in both November and December, adding to the more gloomy picture, with retail sales now having fallen in three out of the past four months. In January, sales of clothing were the biggest culprit with a decline of 1.8 percent m-o-m, but food sales were also weak with a drop of 0.4 percent.
Cautious consumers
The weakening trend in retail sales comes despite what appears to be still favourable conditions for households. Even though inflation rose in January, real wages are still rising at a healthy clip, employment is rising and interest rates are low. The more subdued development in retail sales is however in line with the more cautious approach among consumers that we have seen since the financial crisis, which probably has been enhanced by the latest bout of increased volatility on financial markets and rising worries with regard to the future development of the Danish economy, which makes consumers more reluctant to spend. This tendency is evident in consumer confidence, which has been falling since last summer and indicates continued caution among consumers in coming months (see figure).


Source: Macrobond

Disclaimer

Jes Asmussen

Chief Economist Denmark

Denmark

jeas01@handelsbanken.dk

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