Data Snapshot: Retail Sales - Retail Therapy Comeback?

  • Retail sales were stronger in February, lifting by 0.6%, the strongest monthly growth in three months. The larger increase in retail sales in February is an encouraging sign. However, it is too early to call it the beginning of a firmer trend, given weakness in the previous two months. 

 

  • The strongest sectors in February were department store sales (1.5%) and clothing, footwear & personal accessories (1.1%) and household goods retailing (1.1%). These sectors have been especially weak in recent months.

 

  • Retail sales growth was led by NSW and Victoria, with an increase of 1.1% in both States. Growth was also robust in the Northern Territory (1.1%) and South Australia (0.7%).

 

  • Retailing growth is expected to remain modest in the months ahead, with soft wages growth and high levels of household debt negative for spending. The softening in house prices is also likely to dampen retailing. Retailer margins are expected to remain under pressure, a trend exacerbated by the recent arrival of Amazon.

 

  • Despite the negatives for retailers, strong employment growth over the past year has provided some support for consumer spending.

 

 

Please see the attached report for more information.



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Bank of Melbourne Morning Rep&hellip