As for the details, there were no major changes to the structure of retail sales. Food sales volume remained stable month-on-month in November, so the year-on-year index has improved significantly from last year’s low base, reaching -0.6% year-on-year. This already suggests that there are encouraging signs in this segment as food prices fall.
Last year, we saw a notable disinflation in food prices from 44% year-on-year in January 2023 to 7.1% year-on-year in November, which has contributed to a slow and gradual improvement in food retailing. However, despite strong disinflation, we believe an explosion in food consumption is unlikely. In our view, the direction is clearly upward, but the pace of increase will be gradual, rather than sudden.
On the other hand, and somewhat surprisingly, there was a real rebound in sales in non-food stores, as monthly growth was 0.6%, significantly raising the year-on-year rate to -3.9%. However, we believe this significant recovery may be temporary, as the “Black Friday” promotions leading up to Christmas gave a significant boost to sales.
This follows from the fact that sales at furniture and electrical goods stores, which have been hit hard so far, increased by 4.5% month-on-month (MoM) in November. There was also an equally strong increase in sales of textiles, clothing and footwear (up 9.2% month-on-month). However, one swallow does not make a summer, as total non-food sales are still below 2021 record levels, meaning that while the direction of change is positive, non-food retail is still below its historical peaks.
Finally, there was also a positive variation in fuel sales. After a modest increase in October, fuel sales continued to grow strongly in November. However, despite the monthly increase of 1.5% – the largest increase in five months – the year-on-year rate was still -21.4%. The reason for the sharp year-on-year drop is the fuel price cap, as it was not lifted until December 2022, meaning that the fuel consumption base from last November was kept artificially high.