China’s retail sales rose 2.8% year-on-year in the first two months of 2026, accelerating from a 0.9% gain in December and exceeding market expectations of a 2.5% rise. It was the strongest retail trade growth since last October, as holiday spending provided an early boost. Sales increased sharply for grains, oil, and food products (10.2% vs 3.9% in December) and for clothing, footwear, and textiles (10.4% vs 0.6%). Trade also rebounded for home appliances and audio-visual equipment (3.3% vs -18.7%) and for tobacco and alcohol (19.1% vs -2.9%), while it declined moderately for petroleum and related products (-9.7% vs -11%). Meanwhile, sales eased for communication equipment (17.8% vs 20.9%) and cultural and office supplies (5.8% vs 9.2%), while it continued to fall for automobiles (-7.3% vs -5%). China merges retail sales figures for January and February to account for the varying timing of the Lunar New Year each year, ensuring a more consistent and accurate comparison.

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