Actual (Jun): -1.0% yoy
Consensus: -1.8% yoy
Previous (May): -2.1% yoy
Negative trend goes on. Retail sales declined for the fourth month in a row and suggest that household expenditures remained weak in Q2 and contributed negatively to GDP. A quick look across the retail sector reveals that the negative trend is widespread. In June, car sales declined by 0.4% yoy, less negative compared to previous three months, but still negative.
Sales of motor fuels dropped by 3.5% yoy despite a temporary decline of gasoline prices. Sales of foodstuff decreased by 1.4% yoy, the negative trend lasts already 14 months. Demand elasticity is relatively low in case of food, but we can see demand shifting to cheaper goods. Sales of clothing and footwear are the only positive exception as they are supported by declining prices. Household demand remains in a quagmire.
It is not difficult to spot the main reasons. Data about tax collection and social security contributions suggest that real wages are likely to decline in Q2. Propensity to consume fades as households get more cautious. Volume of consumer credit diminishes. In 2012, our forecast assumes retail sales to decline by 0.5-1.0%.