Polish retail sales stage surprising recovery in May

Polish retail sales stage surprising recovery in May
By bne IntelliNews June 23, 2020

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.