MexECON Blog

January Retail Sales Fall 0.3 Percent

Mexican retail sales fell in January by a seasonally-adjusted 0.3%, after a revised December decline of 2.3%.  That marked the first back-to-back sales declines since last summer.  On an unadjusted, constant-price basis, sales in January were also down 0.3% from the same month one year earlier.  The retail subsectors posting year-over-year declines in January were department stores and shops specializing in home decor, domestic appliances, and computers.  In contrast, the retail subsectors posting year-over-year increases were healthcare; metal and glass products; recreational, paper, and personal products; clothing, footwear, and textile goods; motor vehicles, fuels, and lubricants; and food and beverages.

At the wholesale level, January sales fell 0.5%, reversing part of their 2.4% jump in December.  Wholesale receipts in January were up 1.1% year-over-year.

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

Comment:  As I feared after the December sales report last month, it is beginning to look like Mexican consumption demand will remain weak in early 2014.  Late last autumn, sales got a boost from dramatic sales promotions and a rush by consumers to make purchases ahead of sales tax increases that took effect on January 1.  Now, that dynamic has petered out.  It seems that consumers are once again focused on the lack of meaningful improvement in the labor market and the increased cost of living.  Weak consumption demand will probably continue to be a headwind for Mexico's overall economic growth in the near term.

Patrick Fearon, CFA
Vice President, Fund Management

                                                     Mexican Retail Sales
                                             Seasonally Adjusted, 2003 = 100
                                                         Source:  INEGI
Retail Sales 1401

                                                    Mexican Wholesale Sales
                                               Seasonally Adjusted, 2003 = 100
                                                            Source:  INEGI
Wholesale Sales 1401

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