HU: Retail sales weakened at the year-end

The CSO published retail sales figures for December this morning. The actual figures came as a negative surprise, as the volume of sales increased by just 0.1% y/y, according to the calendar-adjusted statistics, remaining well below our estimate and the Bloomberg consensus. Compared to November, the volume of sales plummeted by 1.2%. In FY 2024, retail sales volume grew by 2.4% annually, according to the calendar-adjusted figures.

Among the three main branches, the calendar-adjusted sales volumes increased by 1.2% y/y in food shops and by 0.5% y/y in non-food retail branches. Meanwhile, automotive fuel retailing dropped by 6.9% y/y in December. The latter was partly due to the rather unsupportive base effect from the previous year, according to the CSO. They added that the 1.2% m/m drop in sales was partly explained by Christmas shopping brought forward to November and the increase in outbound tourism.

For this year, we expect some further recovery in retail sales volume. Low consumer confidence indicators and this years expected slowdown in real wage increases justify caution, however. The overall weak trend of sales volume could slowly improve. A more rapid growth in shop sales is curbed by the increasing relevance of services in consumption. However, incoming large coupon payments of inflation-linked retail bonds should at least partly appear at shops, especially in the first quarter.