Modest positive trend continues in Mexico retail sales

Higher apparel and supermarket sales and partially compensated by lower car and domestic equipment sales mainly pushed Mexico retail sales to grow by 0.2% m/m sa in May. In annual terms, retail expanded 4.1% y/y and maintains a positive trend (4.5% 3m/3m saar).

Although it is positive report, the decline in domestic equipment and vehicle sales should be considered as a sign of some weakness present still in the consumer. 

In fact, in June ANTAD same store sales declined 2.0% m/m sa in real terms and also a decline should be expected in this sector in that month.

"A 0.5% m/m sa contraction is expected for the GDP proxy report, since most of the consumption in Mexico is related to services and these should set the tone of the economic pace in May, as IP already reported a decline (-0.4%)", says Barclays.