Poland's retail sector is growing more slowly

Polish retail sales rose by 3.0% in real terms in May compared with the previous year. While this marked an acceleration in growth compared with April (+1.3%), it fell short of market expectations of 3.7%. This is according to data released on June 22 by the Polish Central Statistical Office (GUS).

Analysts attribute this trend to a combination of slowing income growth, persistently high interest rates, and the economic consequences of the conflict in the Middle East.

“After a weaker April, in which some of the Easter spending shifted to late March due to the early timing of the holiday, May brought a certain degree of recovery,” ING explained in an analysis.

At the same time, the bank noted that consumer spending growth had lost significant momentum compared to the beginning of 2026. Higher energy prices resulting from geopolitical tensions, as well as slower growth in real incomes, weighed on consumer demand.

Consumption Remains Robust but Is Losing Momentum

Bank Pekao also views the outlook for private consumption as increasingly mixed.

“Consumers remain in a relatively good financial position. However, in an environment of persistently high interest rates, it will be difficult to fully offset the effects of slowing real income growth,” the analysts said.

Wage data released at the same time indicated that income growth in 2026 would be significantly weaker than in the previous year. As a result, private consumption is likely to make a smaller contribution to economic growth, while investment will increasingly take on the role of the main driver of growth.

Fuel, furniture, and cosmetics are driving sales

Of the eight main retail segments, six recorded year-over-year growth in May.

Fuel sales performed particularly well, rising by 9.9%. However, this growth was significantly weaker than in April, when sales had risen by 25.6%.

Sales of furniture, household appliances, and audio and video equipment rose by 4.5%, after growing by only 1.0% in April.

Pharmaceuticals and cosmetics also performed strongly, with an increase of 9.3%. Sales of vehicles and auto parts rose by 2.1% following 0.8% growth in April.

Following a significant decline the previous month, sales of textiles, clothing, and footwear also rebounded, rising by 3.8%.

In contrast, sales of food, beverages, and tobacco products fell by 2.8%. The press and books segment also remained in negative territory, down 0.6%.

The broad “Other Goods” segment, on the other hand, posted strong growth of 10.8%.

Decline Compared to the Previous Month

Compared to the previous month, retail sales at constant prices fell by 1.7%, following a 0.8% decline recorded in April.

At current prices, sales rose by 4.4% year-over-year, compared with 2.8% in April. On a month-over-month basis, however, there was a decline of 2.0%.

Seasonally adjusted data show a 3.7% increase compared to the previous year. Compared to the previous month, adjusted sales rose by 0.4%, after falling by 2.8% in April.

No Impact on Interest Rate Expectations

According to economists, the latest data has little impact on expectations regarding the monetary policy of the National Bank of Poland (NBP).

The energy shock resulting from geopolitical tensions in the Middle East is limiting the scope for further interest rate cuts. The NBP had lowered its benchmark interest rate to 3.75% last year following several rounds of easing.

“The latest data do not change either our assessment of economic developments or our expectations regarding the interest rate outlook,” Bank Millennium stated. “Under current conditions, interest rates are likely to remain stable for the time being.”