“Retail sales marginally up in November 2025 at +0.1% m/m translating into a relative stagnation of the annual decline at -4.0% y/y. This was slightly below our expectations, though data revisions have some impact as well”.
For the entire 2025 year, Erste forecasts a steep slowdown in consumption growth. After a robust increase of 8.6% in 2024, sales growth is put at just 0.8% in 2025.
Private consumption is likely to remain subdued as real wages growth is expected to remain negative in the first half of 2026.
However, the report’s authors project some improvement in the second half and the retail sales growth is expected to slightly accelerate in 2026.
The structure of consumption shows significant differences among categories. Food sales inched up by 0.5% m/m and were down -5.1% y/y in November, while turnover for non-food items declined by 0.3% m/m and -3.3% y/y. Sales of car fuel came in at -0.1% m/m and +2.3% y/y.
Consumer confidence went down to -30.8 in December vs -29.7 previously and remained near historical lows. Slightly better future economic outlook could not compensate for bleaker expected financial situation, softer past financial situation, and lower major purchase intention.
„Consumers remain overly pessimistic likely due to the summer tax hikes and persistently high inflation”.
Sentiment in retail trade inched up to -2.0 in December from -2.6 in November. Managers reported higher past business, brighter business prospects and a decrease in inventories.
In its turn, the labor market shows signs of cooling. The average unemployment rate rose to 6.0% in January-November 2025, up from 5.5% for the full year 2024. Real wage growth turned negative in the second half of the year, driven by higher inflation, and stood at -5.0% in October. The employment expectation indicator went up to 100.5 in December from 99.9 prior which was the second below 100 reading since COVID. Managers in manufacturing and retail trade reported higher hiring intentions ahead, while panelists from construction and services reported lower employments prospects.
(English version by Catalina Apostoiu)