MexECON Blog

September Retail Sales Fall 0.7 Percent

Mexican retail sales fell in September by a seasonally-adjusted 0.7%, but that followed revised gains of 0.6% in August, 0.8% in July, and 1.6% in June.  On an unadjusted, constant-price basis, sales in September were up 4.5% from the same month one year earlier.  The retail subsectors posting year-over-year sales increases in September were online and catalogs; recreational, paper, and personal products; food, beverages, and tobacco; home décor, domestic appliances, and computers; motor vehicles, fuels, and lubricants; clothing, footwear, and textile goods; and healthcare.  The only retail subsectors to post year-over-year sales declines were metal and glass products and department stores.

At the wholesale level, sales fell 1.1% in September, after declining 0.2% in August.  Nevertheless, sales at the wholesale level were up 5.1% year-over-year.

The report was released today by INEGI, the official statistics agency.

Comment:  The pullback in retail sales during September does not seem too alarming.  The decline followed three straight months of increases, so it could simply point to consumers taking a breather from their summer shopping spree.  It could also point to consumers holding back on purchases in anticipation of the big holiday sales starting later in the autumn.  In any case, I believe consumer demand remains on an uptrend.  Mexican consumers are adjusting reasonably well to the increased sales taxes that took effect at the beginning of 2014, and to the recent acceleration in inflation.  With Mexican exports strengthening and the construction sector in recovery, the labor market also seems to have firmed, prompting improved consumer confidence.  Rising consumption demand should support continued growth in the overall Mexican economy during the coming months.

Patrick Fearon, CFA
Vice President, Fund Management

Retail Sales 1409

Wholesale Sales 1409

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