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Polish retail sales come crashing down in April

Polish retail sales collapsed an unprecedented 22.9 percent y/y in constant prices in April, the statistics office GUS said on May 22. 

A steep reduction in shops’ turnover in April is hardly a surprise, given the fourth month was the first – and only thus far – full month of lockdown, imposed by the authorities to limit the spread of the coronavirus (COVID-19) pandemic.

Poland had 21,236 coronavirus cases and 996 deaths as of May 24, when just three new fatal cases were reported. That was the lowest since April 1.

“The [retails sales] data, like yesterday’s industrial production, confirm the devastating impact of the COVID-19 pandemic on the domestic economy,” Bank Millennium said in a comment.  

The outlook for the nearest weeks and months is for a slight rebound of retail sales in line with the gradual lifting of the lockdown. That said, Poland’s shops are unlikely to see their turnover grow y/y in May and June, analysts say. 

That could possibly drive the expected reduction of Poland’s GDP deeper than -10 percent y/y in the second quarter, which has been the dominant prediction so far. 

Some analysts are more optimistic. “April is likely to have been the low point as manufacturers resumed operations and some shops started to reopen this month. As a result, the fall in GDP in Q2 may be less than the 10 percent y/y drop we had expected,” Capital Economics said in a comment. 

All retail segments saw sales crash in y/y terms in constant prices in April, GUS data showed. Sales of textiles, clothing, and shoes collapsed 63.4 percent y/y, clearly an effect of the government ordering the closure of shopping malls as potential coronavirus outbreak points.

Car sales declined 54.4 percent y/y with sales of fuels also hit hard, falling 32.9 percent y/y. Sales of domestic appliances fell 16.9 percent in annual terms. Sales of press and books retreated 28.2 percent y/y.

Food and pharmaceuticals – the two segments to record y/y turnover growth in March – also fared poorly in April. Sales of food, drinks and tobacco products fell 14.9 percent y/y. Sales of pharmaceuticals and cosmetics declined 16 percent y/y. 

A still bigger collapse in retail sales in April was prevented by growth in sales via the Internet. The share of online retailing expanded to 11.9 percent of overall sales from 8.1 percent in March (in constant prices).

In monthly terms, retail sales declined 12.9 percent in constant prices in April after falling 3.3% in March. Seasonally adjusted, retail sales fell 14.4 percent m/m in the fourth month.

In current prices, retail sales slid 22.6 percent y/y in April versus a decline of 7.1 percent y/y the preceding month. In monthly terms in current prices, turnover retreated 13.1 percent that followed a fall of 3.3 percent m/m in March.

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