Poland’s retail sales accelerate growth in September but recovery might be short-lived

Poland’s retail sales accelerate growth in September but recovery might be short-lived
By bne IntelliNews October 21, 2020

Polish retail sales expanded 2.5% y/y in constant prices in September after growing 0.5% y/y the preceding month, the statistics office GUS said on October 21. 

The reading is just above the market consensus, which expected an expansion of 2.4% y/y. A more vigorous than in August expansion of retail sales in September shows that the retail sector returned on track to recovery at the end of summer.

“Solid retail sales growth reflects a favourable situation on the labour market as well as improved consumer confidence throughout the summer. Since the collapse of the retail sector in April, we have observed a solid recovery and retail sales have already compensated the April’s losses,” Erste said in a comment on the figures. 

Five of eight main retail segments saw sales expand in y/y terms in constant prices in September, GUS data show. 

Car sales grew 4.9% y/y (-5% y/y in August) while fuel sales retreated 4.8% y/y (-17.9% y/y in August). Sales of food, drinks, and tobacco products added 1.6% y/y (-3.3% y/y in August).
Sales of pharmaceuticals and cosmetics expanded 1.4% y/y (+0.8% y/y in August), GUS data also showed. Turnover in the textiles, clothing, and shoes segment fell 1.7% y/y (+1.2% y/y in August) while sales in the furniture and domestic appliances sector gained 8.6% y/y (+10.2% y/y in August) in the ninth month. 

Sales of press and books also grew y/y in September, at 3% (+1.6% y/y in August). 

In monthly terms, retail sales fell 2.2% in constant prices in September after growing 2.4% in August. Seasonally adjusted, retail sales fell 1%mm in September (+0.2% m/m in August).

In current prices, retail sales inched up 2.7% y/y in September versus an expansion of 0.4% y/y the preceding month. In monthly terms in current prices, turnover fell 1.8%. That followed a decline of 2.6% m/m in August.

“September’s real economy data proved that the economic rebound in the third quarter was solid and broad-based. Our now-casting model points to GDP contracting 3.8% y/y in Q3 but in our view risks are still tilted to the upside,” Erste said.

“On the other hand, the recent sharp increase in new COVID-19 cases and tightening of containment measures will weigh on the performance of the economy in 4Q20 and negative quarterly growth dynamics cannot be ruled out,” the Austrian bank added. Most other analysts of Poland's macroeconomic situation broadly agree with that outlook.