Real retail sales growth still below the zero mark
In accordance with the data published by Statistics Poland (GUS) today, nominal retail sales growth rate reported by businesses with more than 9 employees did not change between February and March, and stood at 0.6%, which was below market consensus (1.5%) and our forecast (1.2%). The growth in retail sales at constant prices accelerated from -0.5% YoY in February to -0.3% in March, coming in below the market consensus (0.3%), but in line with our forecast. Seasonally-adjusted retail sales at constant prices went up by 1.9% between February and March, but retail sales are still below their all-time high reported at the turn of the year 2024/2025 despite the growth.
Later Easter with a negative impact on sales growth in March
The calendar effect of Easter falling later in 2025 than in 2024 (April vs. late March to early April) had a negative impact on retail sales growth between February and March. Consequently, last year’s pre-Easter purchases took place in March, while this year they were shifted to April. This was mirrored in a strong decline in real retail sales growth in the “food, beverage and tobacco” category (-9.4% YoY in March vs. -2.2% in February).
Demand for durable goods is growing
Notably, sales growth accelerated strongly in durable goods categories: “motor vehicles, motorcycles, parts” (18.4% YoY in March vs. 5.1% in February) and “furniture, electronic goods and household appliances” (12.9% vs. 5.8%). This is consistent with the recent rise of the “major purchases” indicator of consumer confidence, and indicates that consumer demand is improving.
Consumer demand to remain strong
Our conclusion from last month - that the sharp decline in retail sales in February was merely an adjustment following the surprising surge in January, and did not signify a reversal of the upward trend or a lasting slowdown in consumption growth - has therefore proven correct. The data underpins our forecast, in which consumption growth is to slow down to 2.5% YoY in Q1 2025 vs. 3.5% in Q4 2024, and to 2.2% for the whole of 2025 vs. 3.1% in 2024. We still believe that the financial asset recovery process, which constrained households' propensity to consume in H2 2024 will slow down markedly in 2025, which will be conducive to a marked acceleration of growth in consumption demand despite a clear decline in real wage fund growth momentum across the entire economy (see MACROmap of 20/01/2025).
Today’s data on retail sales in March is neutral for the PLN and the yields on bonds.
