A strong start to the year for Romanian retail sales remains yet to prove itself

The breakdown shows that the increase was dominated by non-food sales, which rose by a whopping 8.0% MoM, translating into a 9.1% YoY increase. Fuel sales picked up by 1.1% YoY, while food sales advanced by 2.4%. Such a high concentration of growth in non-food items and the large spread versus food items growth is not unheard of, but still rather unusual. A potential explanation could be that consumers had more appetite for the January discounts this year, which could be the case should the February outturn prove weak.

However, on a more technical note, the data itself could be a potential contributor to the strong acceleration, as the base year was changed from 2015 to 2021. While this should not be a standalone issue, the still-needed refinements of the seasonal adjustment models – which the National Institute of Statistics has acknowledged for the GDP series – could potentially play a role. Admittedly, the YoY increase in the gross series, which doesn’t strip away seasonal factors, shows even more substantial numbers and reinforces the broad message that last year’s sharp wage growth plays an increasingly important role in consumers' decisions. But ultimately, we think that these numbers look too strong, too soon for a month when inflation picked up, and the tax burden increased. As such, we believe that downward revisions should not be excluded.