Polish retail sales fell 7.3% year-on-year at constant prices in March (chart), the fall deepening further after a decline of 5% y/y the preceding month, the statistics office GUS said on April 24.

The reading is below the consensus, which expected a decline of 5.7% y/y. The March fall meets analysts’ forecasts of the retail sector entering a protracted recession, driven by inflation eating into Poles’ real incomes.

Poles’ wallets are also thinner as they used up most of the savings accumulated during the pandemic, analysts also say. Finally, the statistical effect of the arrival of over one million war refugees from Ukraine will no longer affect the figures this year.

The overall picture – supported by other high-frequency data published this week – points to Poland’s economic growth at no more than 1% in 2023, analysts predict, with some arguing that the expansion will likely be near 0%.

“With the full impact of monetary tightening yet to be felt and weakness in the euro-zone likely to weigh on exports, we don’t think the economy is set for a marked turnaround,” London-based Capital Economics said. 

Just one of eight main retail segments managed expansion in March, the breakdown of GUS data showed. Sales of textiles, clothing and footwear grew 1.7% y/y in March, the breakdown of GUS data showed. That still represented a considerable slowdown against an expansion of 9.9% y/y the preceding month.

All other retail sectors suffered declines in turnover in March. Food sales fell 4.6% y/y in March, the same decline rate as in February.

Car and car parts sales slid 1.2% y/y (+7.5% y/y in February), while the turnover in the pharmaceuticals and cosmetics segment retreated 1.8% y/y in the third month, reversing from a gain of 2.7% y/y in February.

Fuel sales fell 20.7% y/y in March (-26.2% y/y the preceding month). Sales of furniture, audio and video equipment and domestic appliances dwindled 15.2% y/y in March after falling 10.3% y/y in February.

Sales added an unadjusted 14% month-on-month at constant prices in March after the February gain of 4.6% m/m.

At current prices, retail turnover expanded 4.8% y/y (+10.8% y/y in February); in m/m terms there was growth of 15.4% (-2.8% m/m the preceding month).

Retail turnover also fell 1.3% m/m in March following seasonal adjustment (-4.1% m/m in February).