Fashion
Retail spending rose 0.3 percent in March in seasonally adjusted terms, according to the latest trade figures from the Australian Bureau of Statistics (ABS), beating market expectations of 0.2 percent growth.
This is a slowdown from February’s upwardly-revised increase in retail sales of 0.9 percent month on month, but March spending was still up 3.5 percent compared to the same time last year, representing the fastest year-on-year increase since October 2018.
Monthly sales growth was driven by spending at cafes, restaurants and takeaway food services (up 1.4 percent in seasonally adjusted terms) and clothing, footwear and accessories stores (up 1.2 percent in seasonally adjusted terms).
Spending on food retailing, including supermarkets, was up 0.4 percent and spending on households goods was up 0.2 percent in seasonally adjusted terms, while spending on department stores was down 1.5 percent and spending on other retailing, including pharmacies and newsagents, was down 0.4 percent in seasonally adjusted terms.
By state and territory, spending was up across the board in March, excluding Western Australia, where retail sales fell 0.7 percent in seasonally adjusted terms. Victoria and the Northern Territory each saw a 0.7 percent increase, Queensland saw 0.6 percent increase, followed by Tasmania, up 0.4 percent, New South Wales, up 0.2 percent, and South Australia, up 0.1 percent, in seasonally adjusted terms.
Online retail sales were also up in the month, with NAB’s Online Retail Sales Index showing a 1.7 percent increase from February after the index recorded the sharpest ever drop in monthly online sales.
NAB measures e-commerce sales as representing around 9 percent of total retail turnover in Australia, while the ABS pegs it at around 5.7 percent.
On a quarterly basis, however, retail turnover in the three months to March fell 0.1 percent in seasonally adjusted volume terms, following a flat December quarter. This represents the first quarter of negative growth since the September quarter of 2012.
The fall was led by household goods retailing, according to the ABS, which fell 0.6 percent, and department stores, which fell 1.2 percent. The other categories all rose in seasonally adjusted volume terms for the quarter.
According to Westpac analyst Matthew Hassan, the figures show that retail sales growth in the month was driven by price increases rather than volume.
“The undershoot vs expectations was due to a stronger than expected rise in retail prices which rose, up +0.8%qtr vs +0.7%qtr in Q4,” he said.
“The sub-category detail shows a particularly big rise in food prices (+1.4%qtr vs 1.2% in Q4). Non-food retail prices posted a 0.2%qtr gain.”
According to Hassan, broader economic headwinds are still hampering consumer spending.
“Overall the March retail report points to downside risks to the wider consumer spending estimates in the March quarter GDP, the headwinds that emerged in the second half of last year clearly carrying into 2019,” he said.
