This article is a part of Poland Unpacked. Weekly intelligence for decision-makers
Interactive chart As in previous months, the strongest growth was recorded in durable goods. Sales of cars, motorcycles and parts rose by 11.7% year on year, while sales of furniture, consumer electronics and household appliances increased by 10.6%. Strong growth was also recorded in other goods, at 11.2%, and in pharmaceuticals, cosmetics and orthopedic equipment, at 6.2%.
By contrast, sales of textiles, clothing and footwear fell by 2.7% year on year at constant prices.
How retail sales work
Before assessing these figures, it is worth understanding more clearly how the changes are calculated. Statistics Poland (GUS) calculates retail-sales growth at constant prices by combining changes in the value of sales with changes in prices. The aim is to show how the volume of goods sold has changed, rather than merely how much money customers leave at the checkout.
For example, if the value of sales rises by 10% year on year and prices remain unchanged over the same period, sales at constant prices also rise by 10%. If, by contrast, the value of sales is unchanged but prices fall by 10%, sales at constant prices also increase by 10%. The final result is the same in both cases, but the mechanism is entirely different, which matters when interpreting the data.
Interactive chart Above, I have compared growth in sales at constant and current prices with changes in prices in August this year. Durable goods are particularly interesting. In the case of cars, motorcycles and parts, the value of sales at current prices rose by 4.4% year on year, while sales at constant prices increased by 11.7%. The large gap between the two measures is linked to falling prices in this category. This can be associated, among other things, with the rapid expansion of Chinese brands in the Polish market. It means that underlying demand looks very strong even though consumer spending has not increased at a comparable pace.
The picture is different for household appliances. Here, the increase in sales volumes stems primarily from higher spending, as prices remained broadly stable.
In clothing and footwear, meanwhile, both the value of sales and prices fell, by 5.4% and 2.7%, respectively. For fuel, sales at current prices increased by more than 20%, but almost all of that rise was driven by higher prices.
XYZ view
Overall retail-sales growth in August was relatively strong. So far, there is no clear sign that high fuel prices are materially curbing consumer purchases, although it is still too early to tell whether such an effect will emerge in the coming months. At the same time, consumers are benefiting from falling prices for cars and clothing.
The outlook for retail sales is becoming less favorable in the months ahead, mainly because real wage growth is slowing. In August, real wages rose by 2.1% year on year, reflecting both weaker nominal wage growth and higher inflation.
Consumers may therefore become more cautious about some categories of spending, especially if fuel and energy prices remain elevated. That does not necessarily imply a sharp slowdown in consumption. Households increased their savings over the past two to three years and may now draw on some of those buffers. Even so, retail-sales growth is likely to weaken in the coming months.