SK: Retail Sales Show Double-Digit Growth in December
Retail sales in Slovakia grew by 10.1% year-on-year in December 2024, significantly exceeding our expectations and marking a full year of consistent annual increases. On a monthly basis, seasonally adjusted retail sales increased by 8.2% in December. On average, retail sales for the entire year of 2024 rose by 4.5% year-on-year in real terms, with positive year-on-year growth recorded every month. This rebound follows a challenging 2023, when retail sales declined by 5.8%.
In 2024, the strongest driver of retail growth was non-specialized stores, primarily supermarkets, which account for nearly 40% of total sales. Sales in these stores rose by 4% year-on-year in 2024. E-commerce also contributed significantly, with mail-order sales increasing by almost 29% year-on-year. On the other hand, fuel sellers, IT and communication equipment stores, as well as bookstores, sporting goods, and toy stores (which fall under cultural and recreational goods) faced declining turnover on a y/y basis, according to data from the Slovak Statistical Office.
In 2024, retail sales and overall household consumption rebounded, supported by rising real wages, lower inflation, and a tight labor market. The household savings rate also increased after hitting historic lows in 2023, though it remained below the long-term average. The improving financial situation of Slovak households encouraged consumer spending, making it a key driver of Slovakias economic growth last year.
Looking ahead to 2025, household consumption is expected to continue growing but at a slower pace. Fiscal consolidation measures, which will create inflationary pressures, will put additional strain on household budgets, although real wages should continue to rise. Retail sales could become more volatile in 2025, with consumer confidence playing a crucial role. In recent months, confidence has fallen below the long-term average, mainly due to concerns about the impact of public finance consolidation and overall economic performance.