Romania’s retail sales volume (chart) declined by 2.3% quarter-on-quarter (q/q) in the third quarter of 2025, a 0.3% year-on-year (y/y) contraction, according to data published by the National Institute of Statistics (INS) on November 6.

This was only the second negative annual reading since the Covid-19 pandemic, the first being prompted by a fuel price peak at the beginning of the war in Ukraine. The downturn comes amid government austerity measures, including a freeze on nominal incomes for public sector employees and retirees until the end of 2026. With inflation eroding purchasing power and private sector jobs under threat from slower economic activity, consumer confidence has weakened further.

The drop followed a sharp fall in real wages (chart), which contracted by 3.7% y/y in July-August (latest data available) after rising 2.2% in the second quarter and 4.6% in the first quarter. Real wages had previously grown by around 9-10% y/y during the last three quarters of 2024. Employment growth also slowed to 0.1% in July-August from 0.6% in the first half of the year, after increases of 0.7% in 2024 and 1.3% in 2023.

By product category, food sales saw the sharpest decline, dropping 3.1% y/y and 2.6% q/q in the third quarter. Such a contraction is typical when low-income households are disproportionately affected by fiscal tightening.

Non-food sales edged up 0.4% y/y but still fell 1.8% compared with the previous quarter. Motor fuel sales, which tend to correlate less with income levels, rose 3.3% y/y and 0.2% q/q.

Monthly data showed a partial rebound in September, with sales rising 1.3% m/m after a 4.0% drop in August driven by a value-added tax increase and a 0.7% decrease in July following higher electricity prices.

The official figures align with fast-moving consumer goods (FMCG) data from NielsenIQ, which reported a 1.1% y/y rise in FMCG sales in the third quarter, down from 3.6% in the second and 5.0% in the first. NielsenIQ said shoppers have shifted towards cheaper brands in response to higher prices and weaker income expectations. NielsenIQ also reported that average FMCG prices rose by 3.5% year on year in the third quarter, compared with a 7.9% increase for food goods and an 11.1% surge for non-food goods (which include energy and other non-FMCG items) reported by INS.