Romania’s retail sales shrink by 2.7% y/y in Q3 but show signs of recovery

The negative base effects prompted by the inflationary shock in July-August 2025, including the VAT rate hike, are dissipating, and annual readings will gradually improve during Q4. However, the real income shock has been regressive, with a visible impact on the structure of sales.

Food sales have followed a downward trend since the end of 2024, with the pattern particularly visible since August 2025. Notably, food sales did not increase alongside rising wages and consumer lending during 2024, but were sensitive to the decline in household incomes following the fiscal consolidation measures implemented since mid-2025.

The stabilisation of real wages during 2026 reflects shrinking real incomes in some categories of households (budgetary employees and pensioners), offset by slight real income growth among other, more affluent household categories. The latter are therefore not spending more on food as their incomes rise. This indicates that the impact of fiscal consolidation has particularly affected low-income households.

Non-food sales dynamics partly reflect real wages in the private sector, but also consumer lending, although the two may be correlated. The sharp rise in non-food sales in 2024 was driven by strong consumer lending.

The volume of new loans surged from RON 29 billion in 2023 to RON 47 billion in 2024. More recently, the volume of new loans dropped from RON 14.5 billion in Q2 2025 to RON 11 billion in Q4, although the latter was still up 1.7% y/y, as household consumer confidence deteriorated.

However, consumer lending increased during 2026, in parallel with non-food sales, reaching RON 15.0 billion (+15.1% y/y) in Q3. Even after adjusting for the 7.1% y/y rise in non-food prices during the quarter, consumer lending still demonstrated robust annual growth in Q3.

Non-food sales, which exclude car fuels, decreased by only 1.7% y/y in Q3, while food sales continued to contract by 3.7% y/y, in line with the patterns described above.

In August and September, after the direct impact of the VAT rate hike dissipated, non-food sales actually posted positive annual growth rates, while food sales continued to shrink.

Car fuel sales have been severely affected by higher prices since the Middle East war, but share the pattern observed in non-discretionary goods. In Q3, car fuel sales contracted by 3.4% y/y.