Solid retail sales data
In accordance with the Polish Central Statistical Office's (GUS) data that have been released today, retail sales in enterprises employing more than 9 people increased in current prices by 8.2% YoY in November vs. a 9.7% increase in October, running slightly above our forecast (8.0%) and the market consensus (7.0%). The sales growth rate in constant prices dropped to 6.9% YoY in November vs. 7.8% in October.
Cars are still hampering retail sales
The main factor behind the deceleration of retail sales growth in November were lower dynamics of sales in the category "motor vehicles, motorcycles, parts” (-1.4% YoY in November vs. 9.7% in October). This was the effect of significant delays in car certification reported by automotive companies due to the entry into force of new emission standards from 1 September 2018. Our view is supported by the data on the number newly registered passenger cars, which only slightly increased (2.1% YoY in November vs. -1.5% in October). We believe that the abovementioned supply-side constraints will abate in the coming months, which will positively impact retail sales in Poland.
"Black Friday” boosted retail sales?
Conducive to the faster growth of retail sales were higher dynamics i.a. in categories such as: "textiles, clothing and footwear”, "furniture, audio-video and household equipment” and "pharmaceuticals, cosmetics, orthopaedic equipment”. The increase in retail sales dynamics in these categories may have resulted from the effect of early Christmas shopping done in November. This phenomenon may have been supported by the growing popularity of shopping on so-called "Black Friday” (23 November).
Consumption will not slow down in Q4?
The average dynamics of real retail sales in October-November period (7.4%) stood above its average value in Q3 (5.8% YoY). In addition, the measures of core sales we use, including retail sales excluding cars, point to a marked acceleration in sales growth in November in annual terms. This signals that the rebound in consumer demand is still strong. Combined with the sound labour market data released on Tuesday, it poses a slight upside risk to our forecast of consumption dynamics in Q4 (4.4% YoY vs. 4.5% in Q3).
In our view, today's retail sales reading is slightly positive for PLN and bond yields.