China’s retail sales grew 2.8% year-on-year in the first two months of 2026, up from a 0.9% increase in December and beating market expectations of a 2.5% rise. This marked the fastest pace of retail growth since October, with holiday-related spending providing an early lift.
Sales rose sharply for grains, oils, and food products (10.2% vs. 3.9% in December), as well as for clothing, footwear, and textiles (10.4% vs. 0.6%). Trade also rebounded in home appliances and audio-visual equipment (3.3% vs. -18.7%) and in tobacco and alcohol (19.1% vs. -2.9%), while the decline in petroleum and related products narrowed (-9.7% vs. -11%).
At the same time, growth in sales of communication equipment slowed (17.8% vs. 20.9%), as did sales of cultural and office supplies (5.8% vs. 9.2%), and automobile sales continued to contract (-7.3% vs. -5%).
To smooth out distortions caused by the shifting dates of the Lunar New Year, China reports combined retail sales data for January and February, enabling more consistent and meaningful year-on-year comparisons.
