HU: Retail sales jumped in January

In January, retail sales figures significantly exceeded expectations. The volume of sales grew by 4.7% y/y according to calendar-adjusted figures, well above our estimate and the Bloomberg consensus of 1.4%. On a monthly level, sales volume increased by 2.2%.

Among the three main branches, the calendar-adjusted sales volumes increased by 4.7% y/y in food shops, by 5.6% y/y in non-food retail branches. Meanwhile, automotive fuel retailing rose by 1.9% y/y in January.

The pleasant surprise from the January data appears to be a correction of the extremely weak December data. Sales volume may continue to increase, although real wage growth is expected to slow down in 2025 after last years high figure. It may still remain at positive levels, however. Incoming large coupon payments of inflation-linked retail bonds should at least partly appear in shops, especially in the first quarter.

In 2025, consumption is set to be the main growth driver, similar to 2024. The most relevant risk now is that inflation has started to rise again, which may make households spend more cautiously later.