Retail sales are still rising in Romania: +5.5% YoY in Q1

Despite the drop in consumer sentiment and the rising prices, the retail sales in Romania maintain a certain upward trend, overall: on average, the retail sales volume rose by 5.5% in the first three months of the year (Q1) compared to the same period last year.

The annual growth was the same (+5.5%) for the month of March alone.

Behind the rise of private consumption, demonstrated by the retail sales, there are pockets of optimism (industries) where the employees' incomes can still adjust to inflation.

The households' ample reserves (seen in their bank deposits) built up during the past decade when their incomes have increased significantly, supporting the inertial rise of retail sales as well.

The datapublished by the statistics office INS comes against much bleaker reports from the retailers. Daily Ziarul Financiar quotes store owners and food producers complaining about shrinking sales.

It wouldn't be the first time when the official data fails to capture the real trends, for some reasons related to methodologies - such as a not updated basket of consumer goods or the wrong sample of goods monitored by INS.

The same applies to inflation, officially at 10.2% YoY in March - despite the prices of basic goods in households' consumption basket having surged much more.

By category of goods, the sales of non-food goods rose faster than the average: by 7% in Q1 and by 8.8% in March alone. In principle, this shows a still robust consumer confidence. The food sales were visibly hit by the steep rise in the prices (+11.2% YoY as of March) and rose by only 1.7% YoY in Q1 (+3.5% YoY in March alone).

The sales of fuels demonstrate low elasticity to prices (which increased by 34% YoY) and increased by 9.8% YoY in Q1 (+2.4% YoY in March).

In seasonally-adjusted terms, the retail sales in Q1 increased by 0.8% compared to the last quarter of 2021 (QoQ). The food prices contracted by 1.5% QoQ, the non-food sales rose by 3.9% QoQ, and the sales of fuels defied prices increasing by 5.3% QoQ.

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