Dutch malaise may be drawing to a close

What we’ve seen

A number of retailers have been reporting poor performance in the Netherlands:

  • In May 2014, Dutch department store group, De Bijenkorf posted a 1% fall in sales for the year ending February 2014.

  • Also in May, Alliance Boots reported full-year revenues down 5% in the Netherlands.

  • Carpetright issued a profits warning in March 2014, citing ‘difficult trading conditions’ in the Netherlands.

2013 was weak

The Netherlands has seen an extended period of economic malaise:

  • GDP fell a further 0.8% in real terms in 2013;

  • In 2013, there was zero annual growth in total consumer spending;

  • Total retail sales fell 2.4% in 2013. This was on top of a 1.3% decline in 2012.

Figure 1: The Netherlands: Year-on-year growth in retail sales, selected major sectors, current prices, 2013
[graphic: image 1]
Source: Statistics Netherlands/Mintel

2014 should be better

But there are some positive signs emerging:

  • The country exited recession in Q3 2013, as positive quarter-on-quarter economic growth returned and the IMF forecasts real-terms GDP growth of 0.8% for 2014;

  • Q1 2014 retail sales were the least negative for two years. Positive growth in non-food sales were up, year-on-year, for the first time in more than three years;

  • Consumer confidence appears to be trending upwards:

Figure 2: The Netherlands: Consumer confidence levels, May 2013-May 2014
[graphic: image 2]
Source: Eurostat © European Union, 2013/14

Looking ahead

  • The economic recovery is so far relatively weak. Austerity measures remain in place and households and businesses will also need to strengthen their finances before embarking on spending.

  • Consumers and retailers should not expect a swift recovery.

  • But in retail the lowest point is likely to have been reached: we are seeing early signs of a turnaround.

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