Mexico retail sales: A modest positive trend continues

Retail sales grew 0.2% m/m in May pushed mainly by higher apparel and supermarket sales and partially compensated by lower car and domestic equipment sales. In annual terms, retail expanded 4.1% y/y and maintains a positive trend (4.5% 3m/3m saar). Although it is positive report, it can be highlighted that, decline in domestic equipment and vehicle sales as a sign of some weakness present still in the consumer.

In fact, in June ANTAD same store sales declined 2.0% m/m in real terms and expect a decline in this sector in that month. The report has limited implications for the GDP proxy report due on Friday (we expect a 0.5% m/m contraction), 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%). Mixed report signals some weakness still present but a positive trend remains, says Barclays.