Retail sales in Hungary rose 2.4% year-on-year in August, down from a 4.9% growth in the previous month, while turnover fell 0.7% from July, according to preliminary data from the Central Statistics Office (KSH), Portfolio.hu writes. Analysts described the monthly decline as a negative surprise, although they said the broader consumption trend remained positive.

Food sales increased by 0.5% year-on-year in August, while non-food sales rose 5.0% and turnover at petrol stations increased 3.1%. Online and mail-order sales, which accounted for 8.3% of total retail turnover, jumped 12%.

Gabor Regos of Granit Bank attributed the monthly decline partly to the high base after the July increase (+1.0%), the fading impact of transfers made earlier in the year ahead of the election, and weaker fuel demand. Strong nominal wage growth, relatively low inflation, and improving consumer confidence should support consumption, which most observers see as the main driver of growth.

Fuel sales had increased strongly in previous months, partly reflecting fuel tourism, but the pace slowed to 3.1% year-on-year in August. Rising fuel prices likely contributed to weaker demand, with some consumers switching from cars to public transport, the analyst said.

The exceptionally hot weather may also have affected shopping patterns. While non-food retail sales were broadly flat on a monthly basis, online and mail-order turnover increased by around 3%, while most brick-and-mortar segments recorded monthly declines of 1-3%. Clothing stores were an exception, with turnover rising around 3%.

Food-store turnover fell 0.4% from July, suggesting that some household purchases may also have shifted online during the heatwave, ING Bank senior analyst Peter Virovacz said.

Despite the weaker August figures, the longer-term trend remains positive. Retail sales in August were 6.3% above the 2021 monthly average, according to the analyst, indicating that consumption has continued to expand after the post-pandemic slowdown.

The analyst expects retail sales to continue growing for the remainder of the year, although with significant monthly fluctuations, and forecasts growth of around 5% for 2026 as a whole.

Retail sales increased by 4.3% in January-August, both in unadjusted and calendar-adjusted terms. Food sales rose 2.2%, non-food sales 5.6% and petrol-station sales 7.5% over the period.