Retail sales reported by Puerto Rico’s commercial establishments during the January to December 2015 period reflected a 1.42 percent year-over-year drop, with sales down by $544.7 million to $37.8 billion, Puerto Rico Trade and Export revealed Thursday.
Agency Executive Director Francisco Chévere attributed the descent to the migration spike from Puerto Rico to the U.S. mainland last year.
“Some 65,000 Puerto Ricans migrated in 2015, an 18.1 percent increase from the 55,092 that left in 2014,” he said.
In addition, significant declines in oil prices and the consequent reduction in the price of gasoline, have led to changes in consumption patterns, he said. Gasoline prices recorded a significant decline in 2015 of -24.5 percent. However, the 1.42 percent contraction in sales “reflects a more conservative and cautious behavior by Puerto Rican consumers,” said Chévere.
Sales at gasoline stations represent about 15 percent of total retail sales, so the drops in gas prices and total sales are expected to move in the same direction.
“The lower proportional contraction in sales could indicate that consumers are not yet confident that the drop in gasoline prices will be sustained for long and prefer to be cautious,” he said. “Similarly, it is possible that the savings associated with the drop in the price of gasoline on personal disposable income is being channeled to services or liquidation of personal debt, which would entail changes in consumption patterns that deserve to be studied more in-depth.”
Another factor to consider is a possible neutralizing effect of the increase in sales tax from 7.5 percent to 11.5 percent on consumer savings from the decrease in gas prices. However, in general terms, the report showed that Puerto Rico’s inflation rat, as measured by the change in the Consumer Price Index published by the Puerto Rico Department of Labor fell by 0.7 percent in 2015, compared to the previous year.
The sales report indicates that establishments that reflected the greatest contraction when compared to 2014 were gas stations (-9.65 percent), radio, television and computer stores (-3.73 percent), women’s clothing stores (-3 percent) and new and used motor vehicles (-2.30 percent.)
Meanwhile, sales increased in 11 of the 21 retail sectors tracked. Among the sectors with the greatest increase in sales were furniture stores (5.16 percent), wood, construction materials and mobile homes (3.43 percent), hardware stores (2.98 percent) and other general merchandise stores (2.79 percent.)
According to the report, small- and mid-sized businesses represented 70.9 percent of Puert Rico’s total retail sales, with $26.8 billion on record for 2015. However, that figure represented a 1.89 percent contraction when compared to 2014, when sales reached $27.3 billion.