China sees ‘solid’ consumer spending during Lunar New Year: report

Retail sales grew 6.7% to US$1.7t in the first two months of the year.

Consumer spending in China remained strong in the first two months of the year after retail sales grew 6.7% to US$1.7t, and by 12.7% when compared to its pre-pandemic level, Fitch Solutions reported.

In urban areas particularly, retail sales saw an increase of 6.7% to US$1.01t, whilst retail sales in rural areas grew 7.1%.

“This strong growth was seen across a number of sub-categories, albeit for different reasons to that of pre-Covid-19 trends. Below, we offer insight into this growth at a category level,” the report read in part.

Moreover, the Lunar New Year also boosted spending on food after sales rose 9.7% to US$48.5b despite a high-base effect.

“Grocery spending is traditionally an outperformer during this period of the year, as households increase their spend on groceries and snacks for festivities,” Fitch noted.

“Travel and other movement restrictions, meant many consumers were not able to travel home for the festive period and so households were not joining together, with one large spend, but rather celebrating as separate households, but still spending at high levels in order to treat themselves, even if they were apart.”

Fitch explained that a larger number of smaller parties and festivities drove the growth in food and snack spending in value terms.