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Matthew Hassan, Research Analyst at Westpac, explains that Australian retailers reported a slightly better than expected, though still modest, 0.4% lift in sales in Apr in contrast to market expectations of 0.3% rise.

Key Quotes

“The gain comes after a flat result last month and a patchy period through Dec-Feb, a choppy profile partly reflecting shifting pre and post Christmas sales events.”

“Despite the better out-turn, annual sales growth slipped back to 2.6%yr from 3.2%yr in March.”

“The detail was still fairly mixed, anchored by a 0.3% rise for basic food and a solid improvement for household goods (+0.7%), other retail (0.9%) and cafes & restaurants (1.3%) but with continued weakness across clothing (-0.8%) and department stores (-0.9%). Some of the latter likely reflects continued aggressive price discounting.”

“Overall, the tone in this month’s retail report is slightly better than expected but there are still clear areas of weakness. Exactly how much of this is a sector specific issue remains an open question that the wider consumer spending estimates in the March quarter national accounts will go some way towards answering.”