Shops in Italy are suffering and the one to benefit is not “the usual e-commerce”, but large-scale distribution. Retail sales in June, according to Istat data, recorded a decline in both value and volume (-0.2%) and for both food and non-food products. Compared to a year ago, -1% in value and -1.6% in volume. Online sales are stationary, while those of large-scale distribution are growing. The ones suffering (and often closing) are the shops, which cannot stand up to the competition from large-scale distribution.
In the second quarter of 2024, in cyclical terms, retail sales of food products are slightly increasing in value (+0.1%) and decreasing in volume (-0.1%). As for non-food products, data are stable in value and slightly decreasing in volume (-0.1%). Compared to last year, retail trade records a -1% in value and 1.8% in volume. Sales of food products are growing by 0.1% in value and decreasing by 1.6% in volume. The greatest suffering is for non-food products: -1.7% in value and -1.9% in volume. Perfumery, personal care products (+3.3%) and optical photography and films, magnetic media, musical instruments (+2.5%) are growing. The greatest decrease is for footwear, leather and travel goods (-5.1%) and furniture, textiles, furnishings (-5.0%).
Small retailers are the ones suffering the most. In the first half of the year, the loss was 0.4% of the value sold. Only in June, it was 2%. Even worse for sales outside of shops (street vendors, etc.) which dropped 1.4% in the half-year and 4.2% in June alone. So who sells? The enemy of retailers does not seem to be online. E-commerce is stationary compared to 2023 (we are talking about a +0.1% in the half-year). Competition instead comes from large-scale distribution, the only sales segment that is growing. In the first six months of 2024: +1.4 in value, driven by a +1.9% in food products. Looking only at June, the increase is 0.5%, but still better than online and shops. The food discounters are dragging the large-scale distribution with a +2.2%.
A traditional consumption dynamic: with inflation, consumers head towards stores with lower prices. But with signs of recovering disposable income, positive employment and decreasing inflation, consumption is not responding by restarting. “Purchasing power is recovering, consumption is not. A real enigma: in the face of a 3.5% increase in disposable income between the first and second quarter of 2024, only minimally eroded by inflation (0.2 points), household spending increased by just 0.5%. This means that of the 9.1 billion growth in purchasing power, only 1.6 billion was actually allocated to new consumption” comments Confesercenti. An alarming stalemate.
