Polish retail sales contract in October as COVID-19 restrictions and social gloom hit

Polish retail sales contract in October as COVID-19 restrictions and social gloom hit
By bne IntelliNews November 23, 2020

Polish retail sales declined 2.3% y/y in constant prices in October after growing 2.5% y/y the preceding month, the statistics office GUS said on November 23.

The fall is clearly deeper than market consensus, which expected a dip of 0.7% y/y only but restrictions imposed to contain the second wave of the coronavirus (COVID-19) pandemic inevitably affected turnover. Shops also saw fewer patrons in October, as restrictions limited people’s mobility and the general context of a surging pandemic weakened customer confidence.

Just two of nine main retail segments enjoyed y/y turnover growth in constant prices in October, the breakdown of the data shows.

Sales of pharmaceuticals and cosmetics expanded 1.3% y/y in the tenth month (+1.4% y/y in September) while sales in the furniture and domestic appliances segment gained 11.9% y/y (+8.6% y/y in September).

Other segments suffered turnover declines, with fuel sales retreating the most, at -13.4% y/y (-17.9% in September). Car sales slid 8% y/y (+4.9% y/y in September). Sales of food, drinks, and tobacco products declined 2% y/y (+1.6% y/y in September).

Turnover in the textiles, clothing, and shoes segment fell 9.7% y/y (-1.7% y/y in September). Sales of press and books declined 3.7% y/y (+3% y/y in September).

In monthly terms, retail sales added 2.1% in constant prices in October after falling 2.2% in September. Seasonally adjusted, retail sales expanded 2.1% m/m in October (-1% m/m in September).

In current prices, retail sales fell 2.9% y/y in October versus an expansion of 2.7% y/y the preceding month. In monthly terms in current prices, turnover pushed up 2.3%; that followed a decline of 1.8% m/m in September.

“Retail sales data surprised to the downside in October but we expect a stronger decrease in November as shopping malls have been closed since November 7 and consumer confidence dropped to the lowest level since May,” Erste said.

“With the increasing number of employees on Kurzarbeit schemes, childcare leaves or in quarantine, the financial situation of consumers will deteriorate. Over the weekend, the government announced a plan for gradual easing of restrictions in the coming weeks that should support the retail sector. However, the rebound of retail sales will likely not be as fast as the one in spring as economic outlook remains uncertain and consumer confidence is dampened,” the Austrian bank added.