This article is a part of Poland Unpacked. Weekly intelligence for decision-makers
Interactive chart Retail sales in constant prices rose by 3% year on year in May, Statistics Poland (GUS) reported. This is a decent result, though below the market consensus, which had expected growth of 3.6%. On the other hand, sales increased more strongly than in the disappointing April reading, when they stood at 1.3% year on year.
Following a preliminary agreement between the United States and Iran, hopes have risen for a lasting reopening of the Strait of Hormuz. From this perspective, today’s data looks like a rearview-mirror snapshot. However, the eventual success of US-Iran negotiations is not yet assured, meaning this observation may once again prove relevant in due course.
Normalization across categories
The data points to a gradual return to normality following the turbulence associated with the war in Iran. Above all, the pace of growth in sales of solid, liquid, and gaseous fuels has clearly slowed. It stood at 9.9%, compared with 16.2% in March and 25.6% in April. This is still above the levels seen at the beginning of the year, when growth reached around 5%, but the first signs of normalization are now visible. This likely reflects reduced stockpiling by companies and households, which had previously been concerned about shortages or sharp increases in fuel prices.
Interactive chart For the second consecutive month, households have curtailed purchases of food, beverages, and tobacco products. Sales in this category fell by 2.8% year on year, although this is clearly less severe than in April, when they declined by 5.8%. However, the April reading was negatively affected by the timing of Easter holidays.
Sales in other categories, including durable goods, rose more strongly than in April. Notably, sales of pharmaceuticals, cosmetics, and orthopedic equipment have stood out, with growth dynamics remaining in the 8–10% range since the beginning of the year.
Outlook by XYZ
In a broader perspective, retail sales are growing more slowly than last year. Excluding April, the May reading was the weakest since June 2025. In the January–May 2026 period, sales increased by 2.9% year on year, compared with 3.5% in the same period of 2025.
In my view, the May data better reflects the true state of consumer demand than the readings from the previous two months. The March figure was inflated by one-off factors, while April was heavily influenced by geopolitical tensions.
Private consumption growth is likely to weaken this year compared with 2025, driven by two main factors.
The first is persistent uncertainty regarding energy prices. If conditions develop favorably, its importance may diminish over time, although the losses incurred so far will be difficult to fully recover.
The second factor is a significantly lower rate of real wage growth. Both developments are linked to inflation, but the more important driver appears to be the slowdown in nominal wage growth.