Australia: Flat reading for July retail sales - Westpac
|Matthew Hassan, Research Analyst at Westpac, notes that the Australia’s retail sales disappointed in July coming in flat vs expectations of a 0.3% gain.
Key Quotes
“Annual growth slowed to 2.7% with the monthly trend estimate tracking a very weak 1.1% annualised pace.
There are some caveats to the July number however. In particular, the storetype breakdown showed an unusually large fall in department store sales – down 6.2% in the month in seasonally adjusted terms, coming off a decent 4.5% gain in June.
That volatility may reflect shifts in the timing of sales which can be exaggerated by seasonal adjustment (we had similar issues in 2013 and 2012 with a strong June followed by a sharp fall in July that mostly reversed in August).
Weather conditions may also have played a part with an abnormally mild July (the 5th warmest on records back to 1961 according to the Bureau of Meteorology) although this did not stop clothing retailers from posting a 0.3% gain.
As noted in previous reports, some of the ‘mixed messages’ from retail at the moment likely reflect widely diverging performances by state with consumers in the growth centres in the south-east boosting discretionary spend but those in mining states cutting back.
For total sales this pattern reversed somewhat in July with sales softer in Vic (–0.6%mth) and NSW (–0.2%mth) vs modest gains in Qld (0.5%mth) SA (0.5%mth) and WA (0.3%mth).
Note that all sales figures are in dollar value terms so include any price effects from discounting.”
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