Australian retail sales miss expectations

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By Leith van Onselen

The Australian Bureau of Statistics (ABS) has just released retail sales figures for the month of April, which registered a 0.2% seasonally-adjusted increase in sales over the month, missing economist’s expectations of a 0.3% rise. Annual sales growth clocked in at a solid 5.7%:

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In trend terms, retail sales grew by 0.4% in April and by 6.0% over the year.

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The below chart maps out seasonally-adjusted sales growth by state on a monthly and annual basis:

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As you can see, monthly sales growth was positive in four states and territories, negative in three, and flat in one. New South Wales and Victoria have also driven the nation’s sales growth over the past year – presumably driven by their nation-leading house price booms – whereas sales in the ACT are firmly in the red as Budget cuts bite. Tasmania and the Northern Territory have also experienced strong sales growth, although due to their small size, they would not have had much bearing on the national result.

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Looking at the major categories, you can see that sales growth was positive during April in food retailing, clothing, department stores, and cafes, restaurants and takeaway food, but negative in household goods retailing and other retailing. Australia’s famed cafe culture has also come alight over the past year, with cafes, restaurants and takeaway food recording strong 11.4% annual growth:

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The next chart plots annual retail sales growth in trend terms, and shows that the pick-up in sales over the past year has been driven mostly by discretionary retail, where growth has picked-up from depressed levels; albeit with department stores still languishing:

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It is important to note that the data in this release pre-dates the May Federal Budget and the recent sharp falls in consumer sentiment, which could potentially weigh heavily on sales over the remainder of the year.

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About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.