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Retail sales up by 3.1% y-o-y in September


2012-10-23



Retail sales at current prices grew by 3.1% y-o-y in September, a significant deceleration compared with the previous month, according to data from the Central Statistical Office (GUS). The result is below market expectations, which averaged 4.8% y-o-y.

In comparison with the corresponding period of 2011, sales were up in six out of eight main branch specialisations. The highest increase was noted in sales of furniture, radio, TV and household appliances (up by 16.2% y-o-y), followed by other retail sale in non-specialised stores (up by 14% y-o-y) and textiles, clothing and footwear (up by 12% y-o-y). Sales of fuels went up by 7.3% y-o-y, while sales of pharmaceuticals, cosmetics and orthopaedic equipment rose 5.6% y-o-y. Sales of food, beverages and tobacco products edged up by 0.9% y-o-y. The two categories in which sales declined were motor vehicles, motorcycles and parts (down by 7.6% y-o-y) and newspapers, books and other sale in specialised stores (down by 13.3% y-o-y).

In January-September 2012 retail sales at current prices rose by 7.9% y-o-y.

Retail sales in Poland (%, y-o-y), September 2011-September 2012

Having softened slightly during the month before, retail sales posted a marked deceleration in September, registering only a modest 3.1% y-o-y increase at current prices. In real terms, September sales were down by 0.4% y-o-y, dipping into negative ground for the first time since April 2010, when the crash of the presidential plane in Smolensk and the period of national mourning that followed it kept Poles at home, sharply reducing their willingness to spend.
Admittedly, the result was influenced by unfavourable statistical factors (fewer trading days than a year earlier and a high base of comparison), but it is worth remembering that retail sales have been steadily losing momentum already since the second quarter of 2012. The reason is the noticeable slowdown of economic activity and the accompanying mounting weakness in the labour market. Employment growth has been stagnant, and real wages in negative territory, for several months now. With the financial situation of households deteriorating and with considerable worries about the future, consumer confidence in Poland is now only slightly above the level it was in early 2009, i.e. at the low point of the previous downturn, which is impacting negatively on spending.
Given the anticipated further weakening of economic activity, the situation on the labour market could become even worse in the months ahead, and is likely to remain difficult throughout 2013 as well. Under these circumstances, no rebound in consumption is to be expected in the near future. And while sales numbers for October will be helped by easier year-on-year comparisons thanks to more trading days, we forecast that the real terms growth rate of retail sales will remain close to zero in the remainder of 2012, and that it will move well into negative territory at the beginning of 2013.

Paweł Sionko
Senior Economist, PMR



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