MexECON Blog

December Retail Sales Fall 2.1 Percent

Mexican retail sales fell by a seasonally-adjusted 2.1% in December, after increases of 3.0% in November and 0.8% in October.  On an unadjusted, constant-price basis, sales in December were up 2.2% from the same month one year earlier.  The retail subsectors posting year-over-year increases in December were clothing, footwear, and textile goods; metal and glass products; motor vehicles, fuels, and lubricants; and recreational, paper, and personal products.  The retail subsectors posting year-over-year sales declines included healthcare; department stores; furniture, domestic appliances, and computers; and food and beverages.

At the wholesale level, December sales rose 2.4%, after a revised decline of 1.2% in November.  Wholesale receipts in December were up 4.2% year-over-year.

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

Comment:  Mexican retail sales were boosted in late 2013 by dramatic sales promotions and a rush by consumers to make purchases ahead of increased sales taxes that took effect January 1.  The rise in sales apparently led to increased wholesale activity in the last month of the year, as stores worked to replenish their inventories.  These moves are an encouraging hint that consumer spending could be starting to stabilize or maybe even rebound in the coming months.  It is just as likely, however, that the impact of the sales promotions and pre-tax buying binge will soon dissipate, and that consumers will again focus on the lack of meaningful improvement in the labor market.  Both retail and wholesale activity could be weak in early 2014.  Because sales were so low in early 2013, the year-over-year growth rates could still be positive, but that does not change the fact that the Mexican consumer is unlikely to spend freely in the coming months.

Patrick Fearon, CFA
Vice President, Fund Management

                                                  Mexican Retail Sales
                                          Seasonally Adjusted, 2003 = 100
                                                      Source:  INEGI
Retail Sales 1312

                                             Mexican Wholesale Sales
                                        Seasonally Adjusted, 2003 = 100
                                                        Source:  INEGI
Wholesale Sales 1312

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