August sun failed to heat consumption up
In August, retail sales grew at almost exactly the same rate as in July (3.8% vs. 3.9% yoy). The details of the report do not reveal many surprises. Overall, the August retail sales figure is in line with trends from the past few years. We know, of course, that consumers have cut back on spending this year in response to an unexpected decline in the purchasing power of their incomes, but this must have affected services, not goods.
August sales were slightly weaker than expected (consensus: 4.5%, our forecast: 5.3%), but the reasons for the surprise are rather obscure this time. Sales actually accelerated in five (out of eight) categories, including two of the three largest (automobiles and fuel; the only slight slowdown was in food sales). In fact, the detailed data would suggest an acceleration in sales to 4.5-5% yoy. The surprise must have occurred in the parts covered by statistical confidentiality, or our estimates of the weights of individual categories are subject to error. Nevertheless, this is more of a footnote to the main conclusions.
Retail sales, category breakdown (real, % yoy)
Źródło: Macrobond, Statistics Poland, Pekao Research
First, August sales reflect the effects of temporary fuel price cuts under the CPN package. Fuel sales rose by 1.1% yoy, but sales in previous months were significantly higher than normal, which under normal circumstances would suggest a decline in sales at this time (fuel consumption is relatively inelastic in the short term). Second, a more favorable number of business days boosted sales of durable goods (cars, furniture, and consumer electronics and home appliances). Third, the hot August weather helped sales of clothing and footwear, but not enough to overcome the high base generated a year ago.
Retail sales and household consumption (real, % yoy)
Źródło: Macrobond, Statistics Poland, Pekao Research
We have written extensively about private consumption and its paradoxes this year in our publications. The August reading does not change anything in this regard. We continue to simultaneously see: relatively low growth in total private consumption and a slowdown in real consumer income, alongside a slight (but noticeable on annual averages) acceleration in sales. The weakness in consumption was thus most likely compounded by a shift in its structure toward goods sales, with fuels playing a significant role in this. It can be estimated that if it weren’t for the increase in fuel sales in the spring (and their continued high level afterward), the average sales growth rates in 2026 and 2025 would have been identical. This in itself is still a decent result, given the circumstances. In summary, there is no change in consumption.
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