Founder: In July, the marginal growth rate of home appliance retail sales showed signs of recovery, and the retail market is expected to improve in the second half of the year.

Founder released a research report stating that in July 2026, the total retail sales of social consumer goods reached 39,022 billion yuan, a year-on-year increase of 0.6%; the cumulative amount from January to July was 287,744 billion yuan, a year-on-year increase of 1.2%. Retail sales of food, beverages, and communication equipment led the growth, while the growth rate of home appliance retail showed marginal recovery compared to the previous month. Current demand for home appliances demonstrates strong resilience, and the trend of product structure upgrades continues, stabilizing and warming the growth rate of home appliance retail. The firm believes that the retail growth rate of home appliances is expected to continue its improving trend in the second half of this year. Key points from Founder: The National Bureau of Statistics announced Julys social retail data, indicating a continuing weak recovery trend in consumption. In July 2026, the total retail sales of social consumer goods reached 39,022 billion yuan, a year-on-year increase of 0.6%, with a decrease in growth rate of 0.4 percentage points compared to June. The cumulative total from January to July was 287,744 billion yuan, a year-on-year increase of 1.2%. Among them, the retail sales of consumer goods for key enterprises reached 14,308 billion yuan in July, down 3.4% year-on-year; excluding automobiles, the same-month growth was 2.5%, indicating a stronger overall resilience in essential goods and some durable goods categories outside of automobiles. Retail sales of food, beverages, and communication equipment led the way, while the sectors still dragging down the overall performance remained primarily real estate after-cycle and automobiles. In July, retail sales of communication equipment reached 78.7 billion yuan, a year-on-year increase of 20.4%, while retail sales of grains and oils, food, beverages, and tobacco and alcohol increased year-on-year by 5.3%, 3.5%, and 6.0%, respectively. Retail sales of automobiles totaled 313.0 billion yuan, down 17.0% year-on-year, while furniture retail sales were 14.5 billion yuan, down 8.8%, and sales of construction and decoration materials were 9.4 billion yuan, down 14.2%. The growth rate of home appliance retail showed marginal recovery compared to the previous month. In July 2026, retail sales of home appliances and audio-visual equipment reached 94.6 billion yuan, a year-on-year decrease of 1.9%, with an improvement of 6.8 percentage points compared to June. The decline has significantly narrowed for two consecutive months; the cumulative retail sales from January to July amounted to 637.2 billion yuan, down 6.6% year-on-year, with a cumulative growth rate improvement of 0.81 percentage points. Pressure from a high base is weakening, and home appliance consumption remains resilient. The decline in home appliance retail sales has narrowed for two consecutive months since June, reflecting a gradual weakening of the high base pressure caused by the concentrated release of national subsidies last year. The retail sector is gradually emerging from the pressure testing phase of the after-cycle. Current demand for home appliances shows strong resilience, and the trend of product structure upgrades continues, stabilizing and warming the growth rate of home appliance retail. According to AVC, the sales of improving consumer products such as dishwashers, multi-tub washing machines, and high-refresh-rate televisions maintained counter-cyclical growth in the first half of the year. Home appliance retail is awaiting improvement in the second half of the year. Looking ahead, policies to expand domestic demand are accelerating. In July, the National Development and Reform Commission proposed to expedite the research and formulation of the strategy implementation plan for expanding domestic demand from 2026 to 2030. The policy direction is shifting from product subsidies to promoting income growth, expanding services, and fostering new supplies simultaneously, which is expected to provide incremental support for consumption recovery in the second half of the year. As the base pressure on year-on-year readings of home appliance retail is expected to ease further entering the third quarter, coupled with the continuous release of replacement demand and a new round of policies, the growth rate of home appliance retail is expected to continue its improving trend in the second half of the year. Investment recommendations: It is recommended to pay attention to Midea Group Co., Ltd, Gree Electric Appliances, Inc. of Zhuhai, HAIER SMARTHOME, and Hisense Home Appliances Group, which will benefit from the recovery of domestic sales. Attention is also suggested for home appliance export chain companies such as Zhejiang Supor, Guangdong Xinbao Electrical Appliances Holdings, Kingclean Electric, and Beijing Roborock Technology. Companies in the MiniLED and MicroLED supply chains, such as Hisense Visual Technology, are also worth monitoring. Additionally, attention should be given to commercial heating, ventilation, and cooling chain enterprises like Moon Environment Technology, Bingshan Refrigeration & Heat Transfer Technologies, Shanghai Ruking Technologies, and Xinlei Compressor. Risk warnings: Risks of macro policy changes, rising raw material prices, demand falling short of expectations, and fluctuations in international trade conditions.