Retail sales by category (constant prices, % yoy)

Source: GUS, Macrobond, Pekao Research

As readers may recall, retail sales surged by 8.7% yoy in March due to several one-off factors. The reversal of these factors in April was the reason why the consensus expected a significant slowdown in sales. Most of our assumptions came true, but with a larger magnitude:

• Food sales fell by 5.8% yoy in April. So while the Easter effect was smaller than forecast in March, sales in April fell as sharply as if March had performed in line with our original forecasts. Nevertheless, the rise and fall in sales still fall within the historical range of food sales fluctuations around these holidays. 
• Fuel sales rose by 13.4% mom, nearly 20 p.p. faster than our projections (sic!). Our assumptions here were completely off – we thought that the drop in fuel prices following the implementation of fuel tax cuts (the CPN package) would ease pressure from buyers. Instead, fears of another price hike likely prevailed (fuel tourism cannot be ruled out either). As a result, fuel sales in the last two months have risen as much as during the two previous episodes of “filling up to the brim” following the outbreak of the war in Ukraine and in the fall of 2023. 
• Sales of textiles, clothing, and footwear plummeted by 9.5% yoy after rising by nearly 14% yoy a month earlier. Weather may have played a role here – spring sales occurred a month earlier, following the end of a long winter – but spending on clothing and footwear is discretionary, and deteriorating consumer sentiment may have been the deciding factor. 
• Sales of furniture, consumer electronics, and household appliances slowed from 7.9% to 1.0% yoy, more sharply than we had anticipated. This result must be considered weak. It is worth noting that sales of durable goods ended last year at full speed (+19.8% yoy in December), but came to a standstill after four months. This is an important measure of “voting with one’s wallet,” and in recent months, the slowdown in durable goods sales was likely driven by concerns about consumers’ economic and financial situations. 
• Other sales categories were close to, though generally slightly below, our projections.

Retail sales of furniture and household appliances (constant prices, % yoy)

Source: GUS, Macrobond, Pekao Analizy

How should we assess the condition of the Polish consumer? Given the role of Easter, averaging March and April retail sales always makes sense. In this case, it gives us a quite decent result of +5% yoy, but it is inflated by fuel sales. After adjusting for this effect, retail sales in March-April rose by an average of 2.5-3% yoy, which is slightly slower than in the previous year (3.9%). Private consumption is therefore already weaker, and we are not sure if this is solely due to the oil shock – nominal incomes had already been slowing down, and before the war broke out, we expected a slowdown in both nominal and real incomes. The war has reinforced these trends.