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COVID-19 may have been behind part of January’s weakness, along with the bushfires, according to analysts at ANZ Research. Coronavirus is estimated to hit retail substantially in the coming months through its impacts on tourism.

Key quotes

“Annual growth in retail sales dipped to 2.0% y/y in January. The 0.3% m/m drop in sales over January followed a revised 0.7% m/m drop in December, combining to make the weakest two-month period of growth since 2010.”

“Non-food sales fell sharply in aggregate in January, at -0.9% m/m, after an identical dip in December.”

“While the reversal of growth from the November Black Friday spike was predictable, this was a much sharper decline than expected.”