Despite a drop in turnover of 30% compared to the week before the economic shutdown (from 3 to 9 January), the impact of the first three weeks of the new lockdown on economic activity is now less than what happened between the end of March and the beginning of April 2020, when losses totalled 44%.
This is one of the main conclusions that can be drawn from analysing the most recent report on the transactional evolution of the Portuguese retail system drawn up by the REDUNIQ InsightsThis document not only continuously analyses the system's performance since the fourth quarter of 2020, but also compares it with the impacts observed in March and April 2020 during the 1st General Lockdown.
Evolution of Total Turnover 2021/2020/2019
Another difference observed in the comparison between the two general lockdowns is in the performance achieved by the various categories of the retail system, starting with health and petrol stations, which saw a smaller drop in consumption three weeks after the new lockdown, reducing their turnover by 7% and 27%, respectively, compared to the first three weeks of the lockdown that began in March, when they reduced their total turnover by 81% and 51%, respectively.
Year-on-year change in turnover by category
According to the document, the drop in these two categories is justified by, firstly, the non-closure of some areas of the health sector that were forced to close in the 1st lockdown and, secondly, the greater mobility of the Portuguese in this new lockdown, which is less restrictive than the previous one.
Among the categories most resilient to the downturn in this 2nd lockdown were restaurants and cafés, which, through delivery and take-away solutions, saw a less marked drop in turnover (60%, data from January 2021) compared to the 1st lockdown (83% drop in March 2020). Even so, overall, this category ended up suffering a year-on-year drop of 26%. On the other hand, the fashion (- 92%), perfumery (- 86%) and hairdressing (- 79%) categories once again saw very large falls, due to the total closure of their physical points of sale.
The household appliances and technology and food retail (hypermarkets and supermarkets) categories, on the other hand, did not reach a peak in turnover in this new lockdown as they had in March, when families sought to equip their homes for work and remote education and stock up their pantries. This time, the electronics category fell by 23% and food retail by 6% three weeks after the period from 3 to 9 January.
Total Turnover by Category (Year-on-Year)
Portuguese businesses close 2020 with a 55% drop in foreign turnover
This REDUNIQ Insights report also looks at the year-on-year variation in Portuguese business invoicing in 2020 and the highlight is the 55% drop in foreign invoicing and the 6% drop in invoicing from domestic cards.
A significant contribution to this result was the drop in the second quarter of 2020 - marked by the 1st General Lockdown - which totalled 36.1% compared to the same quarter of the previous year. The following two quarters saw significant falls, albeit smaller than the previous one, with the third quarter ending with a year-on-year change of minus 14.5%, and the fourth quarter minus 8.4%.
In total, the overall turnover of the Portuguese retail system fell by 16% compared to 2019, a result to which the year-on-year drop of 36.1% in the second quarter of 2020 contributed significantly.
As for January 2021, the month began slightly below the reality of 2019 and 2020, with the new general lockdown determining a re-entry into the "sharp falls" with -15% compared to the same period last year, but still lower than in March 2020, also with half a month of mandatory lockdown.
Evolution of National and Foreign Invoicing (Invoicing per Month)
Also with regard to the reality of the retail systems in the different districts, with the entry into this 2nd General Confinement, there was a worsening of the crises experienced in the districts of the largest cities and above all in the most touristic regions: Lisbon, Faro and Porto are the three most pressing examples, having recorded falls in turnover of 32%, 31% and 30%, respectively.
The inland districts and/or those with smaller populations felt this impact less, namely the Azores, Beja and Portalegre, which saw their turnover fall by 10%, 12% and 13%, respectively.
Total Turnover by District (Year-on-Year)
Breaks and reinvention
While the number of foreign transactions has fallen sharply in Portugal due to restrictions on travelling between countries and the fear of contagion, which has had a strong impact on all activities that are directly or indirectly related to stays by foreigners, such as hotels and restaurants, the truth is that many businesses have responded with innovation.
Faced with all the constraints resulting from the restrictions imposed, many businesses have decided to face the pandemic by reinventing themselves. The digitisation of activity, in order to respond to the new consumer trends that have skyrocketed with the pandemic (a fact that is justified by the increase in contracted points of sale) and the growth in the use of the contactlessThe two most visible aspects of this reinvention, which is increasingly present in our daily lives and is on the verge of becoming the main form of payment.
In line with these dynamics, REDUNIQ offers several online payment solutions and contactless that are helping businesses adjust to these new challenges, as is the case with REDUNIQ@Paymentsoption that simplifies the entire remote payment process, or the new TPA REDUNIQ Smartan Android payment terminal that, in addition to accepting contactless paymentsThe company's new mobile app programme, which incorporates a range of apps that help businesses manage and enable them to be fully mobile and digital.
Discover all the data in the REDUNIQ Insights Report:
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