China Retail Sales Post Surprise Rebound

China’s retail sales rose 1.0% year-on-year in June 2026, rebounding from a 0.6% decline in May and defying market expectations of a 0.1% fall. Communication equipment sales jumped 16.5%, while cosmetics increased 12.6%, tobacco and alcohol rose 12.1%, and food products went up 7.9%. These gains were partially offset by continued weakness in big-ticket spending, with automobile sales plunging 16.1%. Sales of home appliances (-8.7%), building materials (-10.5%), furniture (-6.6%), petroleum products (-5.1%), and gold and silver jewelry (-3.4%) also declined. By segment, catering revenue increased 1.2%, while retail sales of goods rose 0.9%. Retail sales excluding automobiles increased 3.0%. On a monthly basis, retail sales rose 0.4%, following a 0.2% decline in the previous period. In the first half of the year, retail sales increased 1.3%, while consumer goods sales excluding automobiles rose 2.8%.

China’s retail sales fell 0.6% year-on-year in May 2026, the first decline since December 2022, following a 0.2% gain in April and defying expectations of a flat reading. The Labor Day holiday in early May failed to offset weak consumer spending, particularly for discretionary and big-ticket items, with automobile sales plunging 16.1%. Sales of home appliances and audiovisual equipment (-15.6%), building and decoration materials (-13.6%), gold and silver jewelry (-8.9%), furniture (-8.7%), and sports and entertainment products (-8.0%) also recorded notable declines. In contrast, sales of beverages (6.1%), tobacco and alcohol (4.8%), Chinese and Western medicines (4.0%), clothing (3.8%), and cosmetics (2.5%) increased. By segment, catering revenue rose 0.6%, while retail sales of goods fell 0.7%. Retail sales excluding automobiles increased 1.1%. On a monthly basis, retail sales fell 0.4%, following a 0.6% decline in April. For the January–May period, retail sales increased 1.4%.

China’s retail sales rose just 0.2% year-on-year in April 2026, slowing sharply from a 1.7% increase in March and well below the expected 2.0% gain. This marked the weakest growth since December 2022, as the fallout from the Iran war dampened consumer demand. Broad weakness was seen in big-ticket purchases, with automobile sales plunging 15.3%, while home appliances (-15.1%), building materials (-13.8%), and furniture (-10.4%) also posted steep declines. These were partly offset by gains in tobacco and alcohol (11.7%), communication equipment (6.2%), grains, oils, and food products (4.1%), and cosmetics (4.7%). By segment, services continued to outperform goods, as catering revenues rose 2.2% while retail goods sales edged down 0.1%. Meanwhile, retail sales excluding automobiles increased 1.8%. On a monthly basis, retail sales fell 0.5% after a 0.1% decline in March. For the January–April period, retail sales increased 1.9%.