Australian retail sales growth still insipid: Westpac's Matthew Hassan
GUEST OBSERVER
Retailers enjoyed a rare gain in August, sales lifting 0.4 percent in the month, the result coming in a touch above Westpac’s 0.3 percent forecast and the consensus expectation of a 0.2 percent gain.
While a win vs expectations and the best monthly gain since October last year, that is not saying much – ‘par’ for retail sales is about 0.5 percent a month.
Annual sales growth is still running at an insipid 2.8%yr with trend sales growth tracking an even poorer 1.7 percent annualised pace.
The detail was in line with expectations as well. As mentioned in our preview, July sales were ‘held back’ by an abnormally large 5.8% fall for department stores that reflected the earlier timing of winter sales. Sales in this category rebounded 3.5 percent in August – ‘normalising’ but still to a weak underlying trend reflecting the specific challenges facing this type of retailing.
Across the other categories: food was up 0.3 percent and household goods up 0.2 percent (another disappointing read given the current boom in housing construction that should be boosting spending in housing related categories).
Both clothing (–0.4 percent/mth) and ‘other’ retail (–0.6 percent/mth) had a soft August. However cafes and restaurants saw another solid gain up 1.2 percent/mth following a 1.4 percent rise in July.
By state, better gains for NSW (0.5 percent), Vic (0.7 percent), Qld (0.7 percent) were partially offset by a 0.5 percent fall in WA.
Matthew Hassan is senior economist with Westpac.
