MexECON Blog

February Retail Sales Fall 0.1 Percent

Mexican retail sales fell by a seasonally-adjusted 0.1% in February, after rising 2.1% in January.  Without seasonal adjustments, but stripping out price changes, sales in February were down 2.6% from the same month one year earlier.  The retail subsectors posting the biggest year-over-year declines in February were those associated with clothing, footwear and textiles; department stores; recreational, paper, and personal products; food and beverages; and healthcare.  Sales rose from the previous year at stores associated with metal and glass products; motor vehicles, fuels, and lubricants; and furniture, domestic appliances, and computers.

At the wholesale level, sales fell 0.9% in February, erasing all of their 0.3% rise in January.  Wholesale receipts in February were down 8.5% from the same month one year earlier.

Comment:  Some Mexican economic sectors have begun to recover from their soft spot at the turn of the year, but wholesale and retail trade still look weak.  That is a significant challenge for Mexico because domestic demand has been the main source of economic growth in recent quarters.  Some of the problem probably stems from a recent spike in food costs.  A new outbreak of avian influenza has forced the culling of millions of birds from commercial farms, and chicken and egg prices have surged in response.  However, consumer demand was weakening even before the avian flu problem surfaced, so there are clearly other sources of weakness as well.  The question now is how much longer it will take before retail and wholesale activity start to recover.

Patrick Fearon, CFA
Vice President, Fund Management

                                                 Mexican Retail Sales
                                         Seasonally Adjusted, 2003 = 100
                                                     Source:  INEGI
Retail Sales 1302

                                            Mexican Wholesale Sales
                                         Seasonally Adjusted, 2003 = 100
                                                      Source:  INEGI
Wholesale Sales 1302

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