The new report has just been released REDUNIQ Insights on the dynamics of consumption during the current period of deconfinement and the figures are encouraging, especially with regard to the turnover of Portuguese businesses.
March, the month in which the economy began to open up after more than two months of mandatory confinement, revealed that the Portuguese retail system saw a slight recovery in national turnover levels, which, although still below pre-pandemic levels (-8% compared to 2019), rose by 4 percentage points between February and March 2021.
Billing trends - 2019, 2020, 2021
As you can see from analysing the graph above, the month of March showed a very slight recovery compared to the figures for February (from -12% to -8%), an overall reality that reflects a fall of 20% that is largely determined by the absence of foreign consumption (-76%). Compared to 2020, the start of this lockdown is characterised by turnover levels close to those that existed just before entry into the 1st Lockdown.
Comparing the reality of 2021 with that of 2019, the Portuguese retail system is still experiencing shortfalls of 20%. However, when the comparison is made between 2021 and 2020, there is a clear improvement (+41%).
Portuguese are spending less
Despite the gradual upturn in national turnover with the entry into the 1st phase of deconfinement, there is one less positive fact that deserves to be highlighted: the decrease in the average amount spent on purchases by Portuguese consumers.
According to the data collected by REDUNIQ Insights, the average ticket (average amount spent on each purchase) is at its lowest since the beginning of 2020 (32€), one euro less than it was during the period between 15 January and 14 March this year (2nd General Lockdown) and 7.2 euros less than the highest average ticket (39.2€) reached during the first general lockdown, between March and May 2020.
Year-on-year variation in turnover for the various periods of the pandemic
According to the report, this downturn in consumption is due to factors as diverse as families' greater concern about saving in the face of the financial difficulties they may face, the return to a degree of normality when it comes to consumption (the end of the need to make such large purchases for fear of running out of stock or for fear of contagion in the shops) and the reduction in purchasing power, especially among the lower classes of society.
Smaller districts perform better
From a regional perspective, the period from 15 March to 4 April 2021 shows much better figures than the same period in 2020 (a year-on-year increase of 40%), which extends across all districts.
However, as was already observed during 2020, the smaller districts ended up performing better than their larger counterparts. In this area, with the exception of the autonomous regions of the Azores and Madeira, which recorded growth above 60%, the districts of Guarda (+47%), Viana do Castelo (+46%), Bragança (+46%) and Beja (+45%) clearly come out on top.
Turnover by District 2020, 2021 (Year-on-Year)
Hairdressers, Health, Fashion and Perfumery show strong signs of recovery
In sectoral terms, the signs of recovery were felt quite strongly between 14 March and 4 April when compared to the same period in 2020. In this comparison, the Hairdressing, Health, Fashion and Perfumery categories saw growth of 1781%, 581%, 339% and 294% respectively.
However, caution is needed when analysing the data, as these activities were objectively closed between 15 March and 4 April 2020, with practically zero turnover levels.
Turnover by Category 2020, 2021 (Year-on-Year)
When you compare deconfinements in terms of invoicing and active points of sale, it's clear that the falls in this 2nd Confinement were smaller and that the invoicing performance after 3 weeks of "reopening" is generally better for almost all categories.
It can be seen that practically all business categories, have increased their turnover in this new deconfinement compared to the previous one, with emphasis on the health (+183% compared to the week of 3 to 9 May 2020), and for the hotels and tourist activities (+181% compared to the first week of May 2020). On this last topic, despite the still very low absolute figures for hotels, this second deconfinement shows positive signs for the recovery of the sector, above all due to confidence in the impact of the vaccination process on the recovery of tourist consumption.
Deconfinement March 2021 vs May 2020 - By Category (Billing Analysis)
Deconfinement March 2021 vs May 2020 - By Category (Analysis of Active Points of Sale)
Another trend revealed is the "inclination" for people to shop at traditional food retailers rather than hypermarkets: comparing the third weeks of deconfinement in 2021 and 2020, traditional food retailers grew by 96% and hypermarkets by 25%.
In summary, after the start of the lockdown, consumption is substantially better in 2021 than it was in May 2020, showing that society has "normalised" with a new life in a COVID World.
Read also: Deconfinement Manual for Companies and Businesses
Contactless already accounts for almost half of payments in Portugal
Another trend highlighted by the REDUNIQ Insights report is the growth of contactlessREDUNIQ, which since the beginning of the pandemic has grown exponentially and become a payment habit for many Portuguese. In March 2021 alone, 42% of the payments made on REDUNIQ's acceptance network were made using the contactless technologyA percentage that contrasts with the 4% of January 2019 or the 10% of January 2020.
Contactless Billing - Year-on-Year Growth 2019, 2020 and 2021 - Share of Contactless Billing in Total Billing
As you can easily see, the contactless continues to increase its penetration in a sustained manner, having surpassed the 40% level in the 1st Quarter of 2021 (in Confinement) (4x more than in the same period of 2020 and around 10x more than in 2019).
There's no escaping the reality of the figures presented. More than a response to the pandemic, the contactless has become an easy and safe alternative for many Portuguese people, and the future of payments. This necessarily leads to the need for the national retail system to equip itself with this technology in its businesses, in order to respond to the new demands of its consumers.
REDUNIQ plays a key role in this whole process. By providing the automatic payment terminal - APT which allow merchants to accept transactions using contactless technology of its customers, REDUNIQ is helping to transform the landscape of the payments industry in Portugal.
Proof of this is the recent launch REDUNIQ Smart Android payment terminal which, in addition to accepting contactless payments by card, chip or MB Way, includes a set of management apps that help businesses and allow them to be totally mobile and digital, such as the certified apps. ZS Mobile e omeutaxi.
When working with contactless technology and management centre connected to the digital world, this new solution Android payment terminal REDUNIQ offers businesses extra flexibility when it comes to managing their resources, since, for example, with the ZS Mobile app the trader can register orders on the terminal, invoice (AT certification) or draw up quotes and orders even without an Internet connection.
E-commerce continues to grow globally
As REDUNIQ Insights gets to grips with national consumption data during this period of demonetisation, it's important to look at what's happening across borders.
According to a infographic by Discover Global Network, the online sales are booming all over the world, driven by new consumer habits and preferences, easy checkout and measures to contain the pandemic, especially social distancing.
Thus, we have that 82% of consumers globally (451 Research data) now make at least some of their purchases online, and of these, 5.2% have migrated completely to online. E-Commerce and 23.6% now entrust most of their purchases of goods and products to this channel.
All in all, this migration of consumers to digital channels meant that, last year alone, the overall value of sales in the E-commerce is estimated at 4.2 trillion dollars (Statista data) in contrast to the 3.5 trillion recorded in 2019 and a long way from the 1.3 trillion recorded in 2014.
Estimates point to this figure growing to 4.9 billion this year, and it could reach 6.5 billion by 2023, demonstrating the growing demand from consumers for this sales channel.
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