The phrase “shop ‘til you drop” hasn’t been used for months as the world hunkered down to stop the spread of COVID-19.
But all that’s changed — at least in Europe.
After falling to record lows in the first quarter while millions heeded stay-at-home orders, retail sales across the pond surged by nearly 18 percent in May compared to April, as shoppers loaded up on clothing, furniture and computer equipment, The New York Times reported.
Germany and France led the way, where government data reports spending has returned to almost where it was a year ago.
“I’m not so worried about the future,” Clémentine Sebert told The Times as she shopped at an Ikea furniture store during her lunch break from the firm where she works as a legal counselor. “If I had been unemployed, I wouldn’t be spending as much.”
Sebert was able to keep working and collect 80 percent of her salary while furloughed during confinement thanks to the nation’s stimulus package.
Sebert is not alone.
She is one of 14 million French workers who benefited from the state-backed program. Such programs throughout Europe, while not as generous, have helped 60 million Europeans stay afloat, the Times reported.
“This is a government-subsidized recovery in spending, but that is exactly the intention,” Bert Colijn, senior economist at ING, told the newspaper. “If this hadn’t happened, the counter effect would be disastrous. It’s a confirmation that the policy is working as intended.”
Europeans have been on a shopping spree as their nation’s economies reopen, a sign that a recovery is happening, the newspaper reported.
Still, economists and retailers wonder if this trend can be sustained or if it’s a temporary blip that may disappear after the “newness” of shopping wears off.
Last week, the European Commission, the executive branch of the European Union (EU), warned the economy would contract by nearly 9 percent in the 28 nations it represents. The panel did not take into account a potential and deadly second wave of the coronavirus.
But at least for now, shoppers have emerged.
The Times reported Dutch flower and plant suppliers say there has been record demand as shoppers beautify their homes.
Last month, the Tax Foundation, an independent tax policy nonprofit based in Washington, D.C, reported Germany temporarily cut the Value Added Tax (VAT) to encourage sales.
As a result, new appliance sales are on the rise, The Times reported.
“Consumers are driving the rebound across much of Europe more than expected,” Holger Schmieding, chief economist of Berenberg Bank, told The Times. “There is a relief that lockdowns are over.”