Retail sales fell 1.9% YoY in November, a greater contraction than Bloomberg’s median of surveyed analysts (-1.4%). On a monthly basis and using seasonal adjusted figures, retail sales decreased 0.1%, after a contraction in October (-0.3%) and worse than the consensus (+ 0.3%). Six out of nine subsectors were down, highlighting hardware at -3.5%, internet sales at -2.1%, and supermarket and department stores at -1.5%. On the other hand, vehicles and household goods were up close to 2% MoM. Most private consumption determinants remain supportive, with the 2024 YTD of the real wage bill at 5.8% in November, while real consumption credit from commercial banks and remittances in MXN stood at 12.6% and 1.0%, respectively. During this year, many items, such as clothes and footwear, were affected by international competition with lower prices, which impacted national production and sales, especially in the Guanajuato region, the most important producer of textiles and leather in Mexico.
Our take: Consumption continued to decelerate with the QoQ/SAAR at 0.5% (from 0.9% in the previous quarter). However, due to resilient consumption determinants, namely the growing real wage bill, historically high consumer confidence, and tariffs on goods from non-treaty countries implemented in December, we still expect the sector to remain slightly on positive terms in 2025. Furthermore, we expect private consumption to be the main driver for GDP this year. Our GDP growth forecast for 2025 stands at 1.5% YoY.
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