Polish retail sales retreated by an unexpectedly mild margin of 7.7% y/y in constant prices in May, the statistics office GUS said on June 22.
A fall had been on the cards but the market expectations were for the shops’ turnover to slide 12.9% y/y after collapsing 22.9% y/y in April. “The better reading was likely a result of pent-up demand from the lockdown period,” ING said in a comment.
Poland’s government imposed lockdown in mid-March to limit the spread of the coronavirus (COVID-19) pandemic. The restrictions began lifting in late May only with some to persist until the end of June.
“The pent-up demand … will fade over time. Thus it will take a long time to reach pre-COVID-19 levels of consumption. As a result of the coronavirus, consumers have become more risk-averse, while the rapid deterioration in the labour market has made them less willing to spend. This prudence will be reinforced in the coming months by a fragile labour market,” ING said.
With consumer confidence unlikely to recover fast, Poland’s GDP is set to contract 8.5% y/y in the second quarter as a result. Household consumption was the primary driver of Poland’s growth before the pandemic.
Most retail segments saw sales crash in y/y terms in constant prices in May, GUS data showed. That said, the declines were milder than in April.
Car sales declined 34% y/y with sales of fuels also hit hard, falling 17.9% y/y. Sales of textiles, clothing, and shoes fell 8.2% y/y.
Sales of food, drinks and tobacco products fell 7.6% y/y. Sales of pharmaceuticals and cosmetics declined 14.1% y/y.
Two segments recorded y/y sales growth in the fifth month. Sales of domestic appliances expanded 14.4% in annual terms. Sales of press and books inched up 0.8% y/y.
In monthly terms, retail sales jumped 14.9% in constant prices in May after falling 12.9% in April. Seasonally adjusted, retail sales grew 17.4% m/m in May.
In current prices, retail sales slid 8.6% y/y in May versus a decline of 22.6% y/y the preceding month. In monthly terms in current prices, turnover grew 14.5% that followed a fall of 13.1% m/m in March.