The turnaround in retail trade is yet to come – sector outlook

By: Trademagazin Date: 2024. 08. 07. 14:45

The retail sales data were worse than expected in June. At the same time, on the basis of the latest data on wage growth in June, which exceeded expectations (14.8% vs. expected: 13.5%), it can be expected that consumers’ caution will dissipate over time, and consumption will return to the upward path. It is an encouraging fact that the recovery of retail sales is a slow but stable process.

Trade performance:

In June 2024, according to the raw data, the turnover volume of retail trade was only 1.7%, adjusted for the calendar effect, it increased by 2.6% compared to the same period of the previous year, but it decreased by 0.1% compared to the previous month, so the expected turnaround in retail sales data.

Examining the sub-sectors, the calendar-adjusted sales volume increased by 3.2% in food and food-type mixed stores, by 3.6% in non-food retail, and by 0.5% in fuel retail compared to the same period of the previous year.
The current data confirms that consumer caution is still present in the economy, and the recovery of retail sales is a slow process.

Examining the first half of 2024, adjusted for calendar effects, the volume of retail trade increased by 2.7% compared to the first half of 2023. It increased by 3.8% in food and food-related mixed retail, 1.4% in non-food retail, and 2.1% in fuel retail.
Consumer confidence fell within the margin of error in July, essentially stagnating since March.Food prices rose by 1.1% on an annual basis in June and fell by 0.3% compared to May. At the moment, no significant rise in food inflation is expected, so the stabilization of price increases at a low level may further ease the caution of consumers.