RO: Strong performance for non-food sales despite less stellar Black Friday season
Retail sales inched up by +0.4% m/m and +9.2% y/y in November, in line with our forecast of +0.5% m/m and +9.4% y/y.
We expect a deceleration in retail sales growth to +4.5% in 2025 from an estimated +8.2% in 2024, though the risk balance is skewed to the downside due to ongoing fiscal consolidation. Households savings buffers should partially cushion the effects from tighter fiscal and income policies.
Food sales dropped by -0.7% in monthly terms but advanced by +4.3% annually. Turnover for non-food items increased by +0.8% m/m and decelerated to +15.2% y/y in November from +18.8% y/y in October due to statistical base effect which suggests that 2024 Black Friday sales disappointed vs 2023. Sales of car fuel grew by +0.3% m/m and +3.2% y/y.
Consumer confidence took a hit in the winter holidays season after reaching three-and-a-half-year highs in November. Households saw their financial situation over the past twelve months as worse but were more optimistic for the next year. Consumers seem less willing to purchase big-ticket items both at present and in the future according to the Economic Sentiment Indicator. It remains to be seen whether recent readings on consumer confidence will be reflected in December retail sales data or the spending spree tide would be extended into festive season.
Retail trade confidence fell in December on pessimistic assessment of business situation over the past three months and depressed consumer demand expected by managers.
Consumer loans origination is currently rising fast, helped by an easing of credit standards and a drop in interest rates for new loans in recent quarters due to ample liquidity surplus in the banking system. This was reflected in strong non-food sales this year which increased by +14.0% y/y in January-November vs the similar period from the previous year.