According to new data from Statistics Denmark released on Monday, July saw retail sales in Denmark fall the most since the Covid-19 pandemic. Economists blamed the collapse in sales on record rainfall over the period, which suppressed consumer spending.

In the biggest drop since the spring of 2021, when pandemic lockdowns crushed consumption, compared to the previous month, seasonally adjusted retail turnover dropped by 4.4%. At the same time, according to the Danish Meteorological Institute, rainfall in the region broke a 92 year record in July, over the reporting period.

Soren Kristensen, chief economist at Sydbank, said, “This meant that many Danes went abroad for a holiday but it can also have prompted others to reduce consumption. A decline of this magnitude is outright concerning.”

However the economist noted there were other negative datapoints, notably a falling consumer confidence index, which likely played a role in the diminished consumer spending.

That data was released last week, revealing that for the first time in 10 months, Danish consumer sentiment had fallen as inflation accelerated, and households became more pessimistic about their own personal finances and the economy more broadly.

According to Palle Sorensen, chief economist at the financial services company Nykredit, in July, inflation in Denmark increased to 3.1% following the reintroduction of electricity taxes which drove utility bills higher, and caused “some uneasiness among consumers.”

He added, “The low consumer confidence is a little worrying in relation to the economic development. The negative view on the economy can affect consumption.”

Economists from the statistics office in Oslo noted that in neighboring Norway, July saw retail sales fall the most since the beginning of the year, with the monthly figure showing a decline of 0.8%, led by falling grocery sales and supported by broad-based declines.