Australia: July retail sales should see some improvement - Westpac

Research Team at Westpac, notes that the Australia’s retail sales rose 0.1% in June with annual growth slowing to 2.8%yr, the weakest pace since mid-2013.

Key Quotes

“The detail showed a sharp 0.6% pull-back in basic food with retail ex basic food posting a decent 0.6%mth gain. The pull-back in food reflects both aggressive price discounting and weak volumes over Q2. The soft June read came despite a boost from the RBA's May rate cut and lower fuel prices. The state split shows a widening divergence between mining and non-mining states that likely account for some of the mixed tone in the survey detail.

July should see some improvement although price effects will continue to limit nominal sales growth to a 0.3% gain. Consumer sentiment dipped on 'Brexit' and election-related concerns but bounced back to around neutral in Aug. Business surveys continue to show above average conditions across the wider consumer sector but flatter conditions for retailers.”