Polish retail sales expanded 2.8% year on year in constant prices in October (chart), after falling 0.3% y/y the preceding month, the statistics office GUS said on November 22.

The reading provided a positive surprise, as the consensus assumed a gain of just 1.4% y/y. Fast-growing real wages, low unemployment rate, and improving consumer sentiment all drove the October turnover growth in Polish stores, analysts say, with the outlook for the remainder of the year and 2024 now looking more and more positive.

“We expect the fourth quarter to see a year-on-year increase in household consumption, with a further rebound continuing into 2024,” ING said in a comment.

“In our assessment … domestic consumers have already shaken off the shocks caused by the pandemic and the outbreak of war in Ukraine. Better-than-expected retail sales data for October pose upside risk to our forecast for household consumption growth in 4Q 2023, which now stands at 2.1% y/y,” Bank Millennium said.

Consumer spending has long been a key driver of Poland’s economic growth. The overall picture – supported by other high-frequency data published this week – continues to point to Poland’s economic growth at around 1% in 2023. A more pronounced growth of around 3% is expected in 2024.

Retail sales’ growth in October owed to just three of eight main retail segments managing an annual expansion, GUS showed in the breakdown of the data.

Sales of cars and car parts grew 12.3% y/y in the tenth month, picking up after a gain of 9.8% y/y/y in September.

Fuel sales accelerated growth, adding 16.7% y/y (+7.5% y/y the preceding month) in October while in the pharmaceuticals and cosmetics segment, turnover expanded 2.3% y/y after a decline of 0.6% y/y the preceding month.

Sales of food, drinks and tobacco products fell minimally at 0.8% y/y in October versus a reduction of 0.1% y/y in September. 

Sales of textiles, clothing, and footwear slid just 1.9% y/y in October, following a major slide of 16.3% y/y the preceding month.

Sales of furniture, audio and video equipment, and domestic appliances dwindled 10.9% y/y in October, still an improvement after a fall of 12.2% y/y in September.

Sales expanded 3.2% month on month in constant prices in October after the September fall of 0.3% m/m.

In current prices, retail turnover expanded 4.8% y/y in October, adding 1.2pp in comparison to the September reading. In m/m terms there was a gain of 3.5% (-0.7% m/m the preceding month).

Retail turnover expanded 2.1% m/m in October following seasonal adjustment, versus an increase of 2.2% m/m in September.