Australia: Oct retail sales up 0.5% - Westpac
Australia’s retail sales posted a slightly better than expected result for Oct with a 0.5% gain vs consensus forecast of +0.3%mth, notes Matthew Hassan, Research Analyst at Westpac.
“Previous months were also revised up slightly. Despite this, sales still show a significant slowing with annual sales growth falling to 1.8%yr from 3.7% in June.”
“The category detail shows a reasonable gain for supermarkets (+0.3%mth), a strong rise for cafes and restaurants (+1.7%mth, the best result since Aug last year) and a notable improvement for non-food retail (+0.4%mth on a combined basis, the first gain since June).”
“By state, sales posted strong gains in Vic (+1%mth) and SA (+1.2%mth) but were more subdued in NSW (+0.3%mth) and Qld (+0.1%mth) with WA tracking the national result (albeit from a weaker starting point).”
“Overall, the result suggests some of the headwinds impacting retail – pressures on family finances impacting consumer spending, and aggressive price competition – eased in Oct.”
“The near term outlook still looks far from positive though with weak wages growth, a slowing housing market and softening sentiment to impact demand and new entrants, most notably Amazon, set to intensify price competition.”
“The latter will likely see some boost to retail as Amazon’s sales get included but will likely displace sales from other retailers and impact pricing in some categories.”