Retail sales of consumer goods in June grew by 1.0% year-on-year, up from 0.6% in May, indicating a sequential acceleration of 1.6 percentage points.

From January to June, service retail sales increased by 5.3% year-on-year, outpacing the growth rate of goods retail sales by 4.2 percentage points, highlighting the relative resilience of service consumption.

From a medium to long-term perspective, the primary growth drivers remain service consumption, new consumption trends, cross-border e-commerce exports, and technology-enabled businesses.

In the near term, it is advisable to focus on: 1) Sectors with high Q2 activity and positive catalysts, such as cross-border e-commerce, education, and jewelry. 2) Defensive stocks characterized by low price-to-book ratios and high dividend yields. 3) Leading companies whose share prices have undergone significant corrections, with short-term headwinds largely priced in. 4) Technology-empowered enterprises.

GTHT's key insights are outlined below.

Retail Sales Growth Rebounded Sequentially in June 2026, with Narrowed Decline in Large-Scale Enterprise Sales

According to the National Bureau of Statistics, total retail sales of consumer goods in June rose by 1.0% year-on-year, accelerating by 1.6 percentage points from May. Excluding automobiles, sales grew by 3.0% year-on-year, a sequential increase of 1.9 percentage points.

Retail sales by large-scale enterprises declined by 2.0% year-on-year, a notable improvement from the 4.9% drop in May, with the contraction narrowing by 2.9 percentage points.

Catering Services Show Sequential Improvement; Cosmetics and Tobacco & Alcohol Perform Well; Home Appliance and Furniture Declines Narrow

① Essential vs. Discretionary Goods: Sales of grain, oil, and foodstuffs increased by 7.9% year-on-year, accelerating by 6.0 percentage points sequentially. Tobacco and alcohol sales surged by 12.1% year-on-year, up 7.3 percentage points from the previous month.

Sales of gold, silver, and jewelry fell by 3.4% year-on-year, but the decline narrowed by 5.5 percentage points. Cosmetics sales jumped 12.6% year-on-year, accelerating by 10.1 percentage points.

Home appliance sales declined by 8.7% year-on-year, with the contraction narrowing by 6.9 percentage points. Furniture sales dropped by 6.6% year-on-year, a 2.1 percentage point improvement from May.

② Goods vs. Services: In June, retail sales of goods grew by 0.9% year-on-year, up 1.6 percentage points. Sales by large-scale goods retailers fell 2.2%, an improvement of 3.0 percentage points.

Catering revenue increased by 1.2% year-on-year, up 0.6 percentage points. Revenue from large-scale catering enterprises grew by 0.1%, improving by 1.8 percentage points.

From January to June, service retail sales grew by 5.3% year-on-year, exceeding the goods retail sales growth rate by 4.2 percentage points, underscoring the stronger resilience of service consumption.

Online Goods Retail Sales Growth Moderates Slightly, E-commerce Penetration Edges Higher

By retail format, from January to June, sales at convenience stores and supermarkets within the large-scale retail sector grew by 6.6% and 3.8% year-on-year, respectively. Sales at specialty stores, department stores, and brand专卖店 (exclusive brand stores) declined by 1.5%, 2.1%, and 8.7%, respectively.

Online vs. Offline: ① The cumulative growth rate of online goods retail sales moderated slightly. From January to June, national online retail sales of goods and services reached 10,071.5 billion yuan, up 5.2% year-on-year. Within this, online goods retail sales amounted to 6,429.6 billion yuan, growing 4.8% year-on-year, a deceleration of 0.2 percentage points from the January-May period.

By category, online sales of food, clothing, and daily-use goods increased by 16.8%, 6.2%, and 1.3%, respectively. ② E-commerce penetration rate increased modestly. On a cumulative basis, online goods retail sales accounted for approximately 25.9% of total social consumer goods retail sales from January to June, up about 0.3 percentage points from 25.6% in the January-May period.

Risk warnings include a potential slower-than-expected recovery in consumption and macroeconomic volatility risks.