Retail sales accelerated their growth from 6.1% y/y in May to 8.2% y/y in June in real terms, according to figures of the statistical office (GUS). In nominal terms, retail sales grew by 10.3% y/y, which was stronger than the 7.9% y/y growth expected by the consensus. Meanwhile, sales were higher by 1.1% m/m in seasonally adjusted terms, retaining a steady improvement over the past couple of months.
The greater part of the acceleration in real growth came from three sectors – vehicles, electronics and household appliances and clothing & footwear. Some may have been influenced by the FIFA World Cup, particularly electronics sales (like TV sets), which saw a 14.4% y/y jump in June, a 7-month high. Meanwhile, clothing & footwear simply recovered their strong performance over the past few months, with May making an exception mostly due to calendar effects. Improvement was observed across the board, with the only exception being fuel sales, which saw a growth at 7.3% y/y, slower by 2.3pps m/m. We explain this with higher fuel prices, which have been pushed upwards by oil price hikes and a weaker PLN.
Overall, retail sales have continued to grow at a very robust pace, reaching as much as 6.8% y/y in H1 2018. Despite strong signs of very robust household spending, the NBP has remained calm on the back of CPI inflation still not reflecting a push on consumer prices. Core inflation (ex. food, fuels and energy) did accelerate slightly, from 0.5% y/y in May to 0.6% y/y in June, but it remains below what has been seen this so far. Therefore, we don’t expect the NBP to be concerned about strengthening household consumption growth for the time being, or at least until this starts affecting inflation more notably.