Australia: Retail flat lines in October – ANZ

ANZ analysts note that Australia’s annual growth in retail sales fell to 2.1% in October, marking its two-year low and well below the medium- and long-term averages for retail growth.

Key Quotes

“Over the month, food categories – particularly dining out (1.1% m/m), liquor (0.8% m/m) and specialised food retailing (1.7% m/m) – saw growth. In contrast, non-food discretionary categories broadly went backwards, particularly fashion, department stores and recreation goods.”

“Annual growth results align with the discord between food/essentials and discretionary categories. Food retailing grew 3.1%, pharmaceuticals/ cosmetics/toiletries grew 5.4%, while household goods and department stores went backwards (-0.2% y/y for each) and fashion grew modestly (1.2% y/y). This speaks to structural budget pressures on households, which are focusing on “essentials” and small luxuries (eg dining out, fashion goods) and less on the bigger “nice to haves” (eg appliances, furniture, recreation products).”

“Monthly growth was weakest in the South East. NSW, Vic and SA all went backwards. Qld (3.7% y/y), the ACT (4.3% y/y) and Tas (3.5% y/y) led annual growth.”