Retail sales grow 4.9% in March

Year-on-year retail sales growth growth slowed from 5.4% in January and 8.4% in the previous month.

In March 2019, the adjusted volume of sales rose by 1.0% in specialized and non-specialized food shops, by 14.3% in non-food retail shops, and by a similar 14.3% in automotive fuel retail.

Within food retail, the volume of sales grew by 1.0% in non-specialized food and beverages shops (accounting for 77% of food retail), and by 0.8% in specialized food, beverage and tobacco stores.

Within non-food retail, sales rose in stores selling furniture and electrical goods (18%), non-specialized shops dealing in manufactured goods (17%), textiles, clothing and footwear shops (14%), second-hand goods shops (13%), and stores selling books, computer equipment and other specialized goods (8.0%). In contrast, the volume of sales fell in shops selling pharmaceuticals, medical goods and cosmetics (-0.8%).

The volume of mail order and internet retail, accounting for 5.2% of all retail sales and involving a wide range of goods, rose by 35%, continuing its multi-year expansion.

Sales of motor vehicles and motor vehicle parts and accessories, which are not included in overall retail data, rose by 19% in March.

In absolute terms, sales in the national retail trade network, as well as in mail order and internet retail, totaled HUF 963 billion at current prices in March. Food, drink and tobacco stores accounted for 46% of all retail sales, while the relevant figures for non-food retail shops and the network of petrol stations were 37% and 17%, respectively.

In January–March 2019, compared to the first quarter of 2018, and adjusted for calendar effects, the volume of sales in retail shops increased by 6.5%. Adjusted sales rose by 3.1% in food, drink and tobacco shops, by 10.6% in non-food retail, and by 11.8% in automotive fuel retail in the first quarter of the year.

Analysts remain optimistic

Speaking to state news wire MTI, ING Bank senior analyst Péter Virovácz said retail sales growth in March was below what analysts estimated. Low food sales were responsible for the surprise, he noted, but added that much stronger data could come out in April. For 2019 as a whole, he forecast retail sales could increase by 5-6%.

Erste Bank junior analyst Zsombor Varga said that despite a slower pace, retail sales growth is still stable, and rising wages, consumer confidence and a tight labor market continue to support domestic demand.

TakarékBank analyst Gergely Suppan attributed lower sales growth entirely to calendar year effects, while K&H Bankʼs chief analyst Dávid Németh said retail sales could grow by 5-5.5% this year due to sales of durable consumer goods.

Retail trade figures for April 2019 will be published on June 5.