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Retail Sales Growth Slows Down

MTI-Hungary Today 2019.07.04.

Retail sales in Hungary climbed 3.0 percent in May from the same month a year earlier, decelerating from a 8.5 percent growth in April, data released by the Central Statistical Office (KSH) on Thursday shows.

Calendar-adjusted data show retail sales were up an annual 2.6 percent in May. Adjusted food sales were up 1.0 percent, non-food sales climbed 4.8 percent and fuel sales were up 0.8 percent year on year.

In the non-food segment, adjusted sales of clothing retailers fell 2.1 percent, sales of second-hand goods were down 7.1 percent, and sales at chemists climbed 2.7 percent. Sales of book and computer shops were down 1.7 percent. Sales in furniture shops increased by 0.1 percent.

Online and mail order sales rose by 38 percent, but still accounted for around 5.8 percent of total retail sales.

Sales at petrol stations were up 0.8 percent.

Sales of motor vehicles and vehicle parts, which are not included in retail sales, were up 13 percent.

In absolute terms, retail sales came to 1,015 billion forints (EUR 3.1bn) in May.

In January-May, calendar year-adjusted retail sales rose by an annual 5.8 percent while unadjusted sales were up 5.9 percent. Adjusted food sales rose by 3.0 percent, non-food sales climbed 8.4 percent and fuel sales increased by 8.0 percent.

Analysts surprised by significant drop in pace

K+H Bank chief analyst Dávid Németh said retail sales could grow by 5-5.5 percent this year and noted that the drop in the pace of sales increases in May came as a surprise and it remains to be seen if it was a one-off event or not.

Analyst Gergely Suppan of Takarékbank said that in spite of the slowdown in May, retails sales could continue to rise at a fast pace in 2019, increasing by 5.5 percent compared with last year’s 6.5 percent increase.

Analyst Péter Virovácz of ING Bank said the May slowdown fits into a trend of decelerating sales increases seen since the start of 2018. The fact that sales growth slowed in all segments reinforces the impression that the slowdown is a part of a pattern, he said.

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