Polish retail sales grew 5% year-on-year (y/y) in constant prices in February, picking up from a 4.4% y/y rise in January, the statistics office GUS said on March 23.

The February reading disappointed, as it came in at below market consensus, which expected a 5.9% y/y gain. Analysts say harsh February weather drove the headline result, discouraging Poles from shopping after they stocked up on warm clothing and shoes in January.

Weather-driven weakening of sales would have been an outlier if not for the risky outlook on household consumption in the wake of the war in the Middle East, analysts say.

“[February reading] was the last snapshot of the Polish consumer before the outbreak of the Gulf conflict. In the coming months, a combination of relatively low nominal income growth and rising inflation will constrain the purchasing power of Polish consumers,” Bank Pekao said in a note.

"We expect consumption growth to slow to 3.2% this year, with risks tilted to the downside,” it also said. That will likely translate to slower economic growth since consumption has long been a key pillar of it.

Seven out of eight main retail segments posted annual increases in February, the same ratio as in the preceding month, GUS data showed.

Fuel sales rose 10.2% y/y in February, after a 4.6% y/y increase the preceding month. Sales of furniture, audio and video equipment and household appliances rose 7.2% y/y in February versus January’s 10.5% y/y gain.

Sales of pharmaceuticals and cosmetics rose 5.5% y/y in February, slowing down from an expansion of 9.6% y/y the preceding month.

Sales of cars and car parts grew 2.7% y/y in February after declining 4.5% y/y the preceding month. 

Meanwhile, January’s leader, textiles, clothing and footwear, grew just 0.85 y/y in February after jumping 17.6% y/y the preceding month. Sales of food, beverages and tobacco inched up 0.2% y/y in the second month after adding 4.2% y/y in January. 

In the press and books category, sales retreated 9.3% y/y in February, after an 8.1% y/y gain the preceding month. The broad “other” segment gained 9.4% y/y in February after growing 0.9% y/y in the first month.

On a monthly basis, retail sales in constant prices declined 5.6% m/m in February after January’s 17.8% m/m decrease.

In current prices, retail turnover rose 4.3% y/y in February, compared with a 3.9% y/y increase in January. Turnover fell 5.6% m/m in current prices in February, compared with a 17.9% m/m decline in the first month.

Seasonally adjusted data showed a 4.9% y/y increase in retail turnover in February, compared with a gain of 5.1% y/y in January, while in m/m terms adjusted turnover declined 1.1% after growing 0.5% m/m the preceding month, GUS said.

Retail sales and other February data do not alter the outlook for monetary policy much - because the changes for any more easing are gone in the context of the energy shock coming in the wake of the war in the Gulf.

The NBP administered six interest rate reductions last year and one in 2026, bringing the reference interest rate down to 3.75%.

“In our view, weaker-than-expected data for February increase the likelihood that the NBP will keep the interest rates stable. In an environment of higher inflation [driven by the Gulf war], rate cuts are unlikely,” Bank Millennium said.

“At the same time, rising interest rates would, in our assessment, require second-round effects, namely an acceleration in wage growth in response to higher consumer prices,” Bank Millennium also said.