HU: Subdued retail sales activity in June

Instant Comment , 6. Aug.
Volume of retail sales rose 2.6% y/y in June

According to the calendar-adjusted statistics, volume of retail sales slowed to just 2.6% y/y in June from 3.6% y/y, published for May. The actual figure proved weaker than both our (pessimistic) estimate of 3% and the Bloomberg consensus of 3.4%. On monthly level, volume of sales declined slightly, by 0.1%, according to the seasonally and calendar-adjusted figures, showing still subdued consumption.

Among the main branches, the calendar-adjusted sales volumes increased by 3.2% y/y in food shop and by 3.6% y/y in non-food retail branches. The latter represented the only modestly positive aspect of the current statistics, showing a slight acceleration in June, compared to the even more subdued sales activity of the previous months in non-food branches. Meanwhile, automotive fuel retailing grew by 0.5% y/y.

Overall, today's data was negative, showing that despite a significant rise in real wages, household consumption remains low. The sector is still spending cautiously at retail shops and opting to increase savings instead. These trends may explain the disappointing second-quarter GDP figures released last week, indicating that consumption's contribution to GDP may have been lower than anticipated, reinforcing worries about the economic prospects for the rest of the year.