Online retail booming in Holland

Online sales in B2C webshops in the Netherlands again increased by an amazing +38% in July 2020, compared to last year. There is a continuing shift towards online shopping since the COVID-19 outbreak in March. This is one of the main drivers behind  the positive trend in total (online and offline) retail sales, that went up +10% in July (second consecutive month). Over Q2 2020, a +55% growth in B2C ecommerce revenues was reported, while total retail sales over this period went up +6%. This was recently reported by the Dutch Statistics Bureau CBS.

The breakdown of the websales in Holland shows that multichannel retailers increased their online sales by over 51% in July after an astonishing +68% during the lockdown in Q2 (all compared to 2019). For some of these retailers however, this still wasn’t enough to compensate for the lower sales in their physical stores. Online pure players saw their revenues grow by +30% in July (to last year), after a +45% jump in Q2.

Both Dutch food and non-food retail took their share of the overall growth, with the exception of retail in fashion and shoes, that suffered severely from the corona-virus.

In the food sector, both supermarkets (+5% in July) and specialty stores (+11% in July) in the Netherlands are flourishing. Supermarkets are succesfully expanding their online activities, while specialty stores have the sympathy of the consumer (support your locals), combined with the shift from going out to restaurants to inhouse food consumption.

Overall, food retail has done well during the corona crisis sofar, with +7.5% in revenues in the lockdown period in Q2 and +5.6% in July (compared to 2019).

In the non-food sector, retailers in DIY, floors and kitchens continued the high double digit growth from the first 6 months of 2020 in July (+21%), as did retailers in consumer electronics and white goods (+12% in July).
For retailers in fashion (-29%) and shoes (-25%) the severe sales losses in Q2 were stopped in July (-1.4% resp. -1.8% compared to 2019).
As a result of this, the overall negative trend in non-food retail during the lockdown in Q2 2020
(-1.2%) turned into +10.4% growth in July (compared to 2019). 

Looking forward, in a study from August 2020 by the Dutch leading bank ING Bank, year on year growth in webshops (only pure players) for this year is estimated at +25%, two times higher than the +13% from 2019. For multichannel retailers, ING Bank is forecasting a +35% increase in online sales in this year.

The outlook for 2021 is less positive, although it seems fair that the extremely high growth in 2020 can hardly be repeated year after year. But still, ING Bank predicts +20% growth for webshops (pure players) and +25% growth for multichannel retailers. This is, in both cases, higher than the pre-corona results.   

Total retail sales in Holland are expected to grow by +4% in 2020, according to the ING Bank study. Food retail is driving this growth (+6%), while non-food retail is facing a downfall (-2%). The outlook for 2021 is not positive for non-food (-0.5%), says ING Bank, mainly because of higher unemployment, low consumer trust and the ‘temporary lockdown impulse’ in 2020, that is not continued in 2021. ING Bank expects total retail sales to grow by just 1%.

The size of the total retail market in Holland was €101.3 bn (without VAT) in 2019, according to Retailinsiders (cooperation of the trade associations for retail and digital commerce) and the Statistics Office. Combined with the growth rate predicted by the ING Bank study, this will lead to total retail sales of €105.4 bn in 2020 (+4%) and €106.5 bn in 2021 (+1%).

Also, based on Retailinsiders data and the ING Bank study, webshops in the Netherlands (only pure players) will grow their online product sales from €11 bn in 2019 to € 13.8 bn in 2020 (+25%) and €16.6 bn in 2021 (+20%).

Together with the online sales by multichannel retailers, this leads to the conclusion that sales in brick and mortar stores will decrease in 2021. Based on the current developments, with the number of physical stores going down and the number of webshops going up, ING Bank concluded that by the end of 2021, the number of webshops in Holland will equal that of brick and mortar stores, with 50,000 each.

Author: Ed Hensen

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