Good retail sales data, consumer sentiment keeps improving

Retail prices go slightly down

In accordance with the data published by Statistics Poland (GUS) today, nominal retail sales growth rate reported by businesses with more than 9 employees came in at 4.3% YoY in May, down from 7.9% in April, printing slightly below the market consensus (4.7%) and above our forecast (4.1%). The growth in retail sales at constant prices also slowed, from 7.6% YoY in April to 4.3% in May, printing above our forecast (4.0%) and below market consensus (4.4%). Seasonally-adjusted retail sales at constant prices contracted by 2.0% between April and May. It is also worth noting that YoY retail sales prices dropped for the first time since April 2024 (by 0.1% YoY).

Sales coming back to normal as the impact of Easter faded

The calendar effect of Easter falling later in 2025 than in 2024 (April vs. the turn of March and April) had a negative impact on retail sales growth between April and May. Consequently, last year’s pre-Easter purchases took place in March, while this year they were shifted to April. The effect faded in May, and the sales growth went back to normal. This was mirrored in a strong decline in real retail sales growth in the “food, beverage and tobacco” category (1.5% YoY in May vs. 9.7% in April).

Strong demand for durable goods continues

Notably, sales growth continued to accelerate strongly in durable goods categories: “motor vehicles, motorcycles, parts” (15.7% YoY in May vs. 14.9% in April) and “furniture, electronic goods and household appliances” (18.9% vs. 13.2%). In our opinion, a quick rise in demand for durable goods suggests that the consumer demand recovery is a lasting one. Our conclusion is also underpinned by the June results of consumer confidence survey. The current major purchases trends indicator went up in June to reach its highest level since March 2020. The indicator representing major purchases trends in the next 3 months also went up in June, reaching the highest level since March 2025.

Substantial upside risk to Q2 consumption growth

Retail sales data for May is indicative of an upside risk to our forecast of consumption growth in Q2 (2.1% YoY vs 2.5% in Q1). The sales data also indicate that the slowdown in consumer demand growth in the coming quarters may be less pronounced than we expected and that economic growth in 2025 may be higher than we currently forecast (3.1%). In the next MACROmap, we will discuss the outlook for consumption in the quarters to come in more detail.

Today’s data on retail sales in May is neutral for the PLN and the yields on bonds.