Australia: March’s tepid growth in retail sales casts a shadow on consumer spending in Q1
Nominal retail sales in March rose 0.3% over the previous month in seasonally-adjusted terms, following February’s revised 0.9% jump (previously reported: +0.8 month-on-month), which had marked the strongest expansion in over a year. This was marginally above market expectations of a milder 0.2% increase. March’s soft reading implies that retail sales in inflation-adjusted terms fell 0.1% in the first quarter as a whole, which spell troubles for the performance of consumer spending—which accounts for almost 60% of GDP—in Q1.
March’s increase came on the back of higher sales in clothing, footwear and personal accessory; cafes, restaurants and takeaway food services; and food retailing. Meanwhile, sales in department stores as well as other retailing contracted.
In annual terms, retail sales expanded 1.7% in March, notably down from February’s 3.2% increase. Meanwhile, annual average growth in retail sales declined to 2.8% from February’s 3.1%.