Retail sales match wages

So, after a big bounce in July of 0.8% and solid follow through in August of 0.6%, ABS September Retail Trade slowed again to 0.4%. To the charts. The result was in line with expectations:

It looks like retail sales growth is now running at roughly the same rate as wages growth, in the 3.5% range, which may mean that the great savings pulse has plateaued, at least for the time being.

Sales also showed some month on month joy at last for the Harvey Normans of this world:

Growth was solid across the segments, though it is clear that food offers the overall index strong support in year on year terms:

Even ex-inflation there is still some growth:

But take out food and total sales are going nowhere fast:


  1. “But take out food and total sales are going nowhere fast”… and that’s the crux of the matter…food can’t be taken out of the mix. It’s a necessity, regardless of price. Discressionaries, on the other had, can and will. And housing is discressionary, to the extent that there is most always a cheaper alternative to where ever one lives. Housing prices, via ‘trading down’ and a cheaper rent will start to take off soon..if it hasn’t already!

  2. Perhaps the money people aren’t investing to get into the property ladder has to go somewhere like retail.

    I assume many people are saving deposits and planned to buy in the near future. Now seeing that house prices are falling, they may be putting that decision off and feeling like they deserve a bit a shopping after all that saving.

    But that can only last so long if manufacturing keeps struggling and China slows as is likely. Europe, well I am confident Greeks will vote to stay in the Euro. Some insane scare campaigns looking one year ahead instead of 10 will ensure it.

    • Will be interesting to observe the longer term conditions in retail and hospitality – the PSI Report HnH commented on today shows the growth in new orders was lowest in sectors directly exposed to lower household spending – retail and hospitality.

      ABS retail sales reports historical, the PSI new orders predictive?

      • I am suggesting, if I read the PSI report correctly, that as growth in new orders was lowest in the retail/hospitality subsectors this may be if not predictive perhaps indicative of future activity in these two areas. That is, possibility for a decline in retail sales and hospitality (post Xmas).

        ABS retail sales historical, PSI new orders predictive?

        Is that close or am I totally off the mark?

  3. Jumping jack flash


    Nobody seems to be leveraging their wage growth before they spend it. They’re only spending their wages! Can it be true?

  4. Is it not that the increase in savings observed is only super accounts in cash and smart property investors who have already sold up.

  5. The fact that food is included in retail is laughable.

    Very little of food expenditure in a supermarket is discretionary expenditure.