ANZ Data Show Weak Non-Food Retail Spending

ANZ-observed spending fell 1.4% y/y in the week to March 4, which was less negative than the previous week. Non-food retail expenditure was particularly soft, which is another indicator pointing to a weak February retail sales result (published March 28). The RBA noted the slowdown in consumption but that there is still a lot of uncertainty over the outlook for households. ANZ did observe that consumers have weathered the first stage of refis well but that they continue to face higher rates and inflation.

• Non-food retail spending fell 4% y/y whereas discretionary services travel rose 10% y/y and entertainment +17% y/y. ANZ also reported that foot traffic in Melbourne had returned to pre-pandemic levels and that over 100k people had attended concerts in Melbourne and Sydney last weekend.
• However, the strength in these types of services will not be enough to offset the decline in the more important non-food retail sector.