Australia: Disappointing retail sales in October – Westpac

Matthew Hassan, analyst at Westpac, notes that Australia’s retail sales disappointed again in October, holding flat vs expectations of a 0.3% rise.

Key Quotes

“The spending 'strike' of Q3 (see here) looks to have extended into Q4 with still no evidence of a meaningful boost from tax refunds or interest rate cuts – the combined value of which will be adding around $16.6bn to household disposable incomes over the year to June 2020.”

“The breakdown by size continues to show small retailers bearing the brunt of the slowdown over the last year with sales in an outright contraction running at a –1.8% annual pace. Sales growth across larger retailers has been steadier, holding around 4-4.5%yr.”

“Overall this is yet a disappointing retail result indicating no boost from recent policy measures. Retail conditions remain very difficult – particularly for smaller retailers, those without online channels and in segments exposed to the downturn in housing.”

“ While November may have seen some improvement, with early reports suggesting 'Black Friday' sales have been well-attended, the signs are still decidedly mixed, weak vehicle sales suggesting consumers are still in 'lock down' mode with discretionary spending.”