Retail Sales Expected to Grow Further But May Lose Some Steam

Bratislava, March 3 (TASR) – Improved consumer trust, which reflects the robust labour market, as both the employment rate and salaries have been rising, and record-low interest rates began to have a discernible effect on the sales of Slovak businesses in late 2016 and early 2017, TASR learnt from UniCredit Bank Czech Republic and Slovakia analyst Lubomir Korsnak on Friday.

“In January 2017 sales rose mainly in some sections of the non-food segment. It appears that post-Christmas sales primarily concerned electronics retailers, but online stores also did well,” said Korsnak. The two categories posted annual surges in revenues of 33.9 and 31.9 percent, respectively.

On the other hand, interest in items included in the ‘culture and recreation’ bracket (books, toys, sports gear) and sold in brick-and-mortar shops tapered off considerably after Christmas.

Korsnak said that the Slovak economy continues to grow at a rather dynamic clip, which has a positive effect on the labour market. Low interest rates should continue to buttress household consumption. All in all, growth in retail sales is set to persist in the months ahead, although it may lose some of the momentum generated by post-Christmas sales. Revenues are expected to grow by 3-5 percent annually, said Korsnak.

Slovenska sporitelna analyst Katarina Muchova said that January built on and reinforced favourable developments on the labour market and in consumer confidence from the last two months of 2016. Prospects are encouraging for the months ahead, as developments in employment and, by extension, unemployment and consumer trust should continue to increase the disposable incomes of households.

The Statistics Office announced that retail sales shrank by 0.4 percent month-on-month in January, but swelled by 7.4 percent on the year.