Retail spending rose by just 0.1 per cent in January, missing market expectations in another blow to Australia’s beleaguered retail sector.
Seasonally adjusted retail spending rose to $27.02 billion following a fall of 0.4 per cent in December, but the increase fell well short of consensus expectations for a 0.3 per cent rise and beating the predictions of only the most pessimistic economists.
The data, released on Thursday by the Australian Bureau of Statistics, came a day after the ABS said the economy undershot Reserve Bank and market forecasts in 2018 by growing just 2.3 per cent.
The impact of sluggish consumer spending on GDP was cited as a major concern by economists, and Thursday’s data showed department stores and clothing as a drag on retail spending for January.
‘After yesterday’s disappointing GDP print there was no real relief in the retail turnover figure for January,’ said Sarah Hunter, chief Australia economist at BIS Oxford Economics.
‘This is broadly in line with the underlying pace of growth seen over the last three months and suggests that, while conditions for households haven’t worsened significantly, they also haven’t improved.’
Food, other retailing, and cafes and restaurants gained over the month, while online sales rose more, accounting for 5.6 per cent of total spending, up from 4.7 per cent a year earlier.
Ms Hunter said the rise in online sales is ‘confirming that the competitive environment remains challenging for traditional bricks and mortar stores’.
The Australian dollar briefly dipped 0.2 per cent against the US dollar, to 70.22 US cents, but swiftly recovered.