In accordance with the data published by Statistics Poland (GUS) today, nominal retail sales growth reported by businesses having more than 9 employees surged from 2.7% YoY in December to 6.1% in January, printing markedly above market consensus (2.5%), which was the same as our forecast. Growth in retail sales at constant prices accelerated from 1.9% YoY in January to 4.8% in February, also markedly ahead of market expectations and our forecast (both 1.5%). Seasonally-adjusted retail sales at constant prices went up by 0.6% between December and January. This means that retail sales in January remained well below their all-time high reported last June.
Strong growth in durable goods sales
As regards the data breakdown, particularly noteworthy is a strong growth in the sales of furniture, electronic goods and household appliances, from -4.0% YoY in December to 13.6% in January. Consequently, the annual sales growth in that category reached its highest level since April 2022, which was the time when the inflow of refugees from Ukraine markedly boosted the sale of durable goods. A recovery in demand for those goods seen last January mirrors the results of the GUS consumer confidence survey, which showed that the “home improvements over the next 12 months” indicator for January 2025 reached the highest level since January 2021, i.e. since the adoption of COVID-19-related restrictions. In this context, it is worth noting that the demand for durable goods in that period was driven up by movement restrictions and increasing transition to remote work during the pandemic, the goods being often purchased online. Consequently, it can be assumed that the strong increase in demand in the “furniture, electronic goods and household appliances” category is connected, to some extent, with a short life cycle of certain durable goods and the need to replace them with new ones.
Upside risk to consumption growth forecast
The recovery in demand for durable goods was not the only factor that substantially boosted retail sales in January, though. We estimate that the growth in retail sales excluding “furniture, electronic goods and household appliances” and “motor vehicles, motorcycles, parts” (where sales went up by 21.9% YoY compared to 25.1% in December) accelerated from 0.7% YoY in December to 2.6% in January, reaching the highest level since July 2024. It indicates that the consumption demand recovery is broadly based. Furthermore, in our view, the strong acceleration of retail sales growth in January took place amidst a marked slowdown of real wage fund growth across the entire economy, which indicates that the households’ propensity to save is decreasing. The decrease means that the financial asset rebuilding process, which was squeezing the households’ consumption propensity in H2 2024, may slow down earlier than we expected (see MACROmap of 20/01/2025). Consequently, today’s retail sales data for January is indicative of an upside risk to our forecast of consumption growth in Q1 (2.5% YoY) and all over 2025 (2.2%).
Today’s data on retail sales in January are positive for the PLN and the yields on bonds.
