The Australian Bureau of Statistics (ABS) has just released retail sales figures for the month of May, which registered a 0.5% seasonally-adjusted fall in sales over the month, missing economist’s expectations of a flat result. Annual sales growth clocked in at a reasonable, but weakening, 4.6%:
Following recent falls (sales fell 0.1% in April and were flat in March), Australian retail sales are at their lowest level since December 2013, in seasonally adjusted terms.
The below chart maps out seasonally-adjusted sales growth by state on a monthly and annual basis:
As you can see, monthly sales growth was positive in two states and territories and negative in six. New South Wales, Victoria, Tasmania and the Northern Territory also experienced sales growth above the national average over the past year, whereas Queensland and South Australia experienced softer sales growth, and sales in Western Australia and the ACT actually fell.
Looking at the major categories, you can see that sales growth was positive during April in food retailing and cafes, restaurants and takeaway food, but negative in the other categories. Australia’s famed cafe culture has also come alight over the past year, with cafes, restaurants and takeaway food recording strong 11.6% annual growth:
The next chart plots annual retail sales growth in trend terms, and shows that the pick-up in sales over the past year has been driven mostly by discretionary retail, where growth has picked-up from depressed levels; albeit with department stores still languishing. However, growth appears to have peaked in both the discretionary and non-discretionary retail alike (see next chart).
Overall, retail sales appear to have been adversely impacted by the May Federal Budget and the corresponding sharp fall in consumer sentiment, which if maintained, could also weigh heavily on sales over the remainder of the year.
