Retail turnover accelerated on an annual basis, but fell compared to February – sector outlook

By: Trademagazin Date: 2025. 04. 08. 12:28

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As expected, weaker data came from stores: retail sales decreased by 0.6% in February compared to January, while there was an annual increase of 3.3%. On a fixed basis, we managed to exceed the 2021 average level by 1.3%. The monthly slowdown covers a wide range of stores, while the annual growth was driven by the food trade and the pharmaceutical and fragrance categories. According to store managers and retail property owners, March data will not be strong either, and the traffic dynamics are more similar to February than to January, and in addition, last year’s March traffic was also boosted by Easter, so a strong base effect can be expected this year.

However, Monitorblog expects that the introduction of the retail margin cap on March 17 will cause a resurgence in turnover after the weaker February and the first week or two of March, meaning that from the perspective of the growing trend, the February data looks like a one-off negative correction. At the same time, the government promises announced at the end of February and the margin cap system have not yet had an impact on consumer confidence, as consumers were still in high uncertainty in March, which is further strengthened by the high – albeit slightly decreasing – food inflation and the weakening forint exchange rate. According to the confidence indices, trade is no longer the most pessimistic sector, but consumer confidence still stagnated in March. The inflationary effects of the margin cap may appear in the next data release, the March data, which will be released tomorrow.