MNI 5 THINGS. Australian Retail Sales Disappoint In January

By Lachlan Colquhoun

     SYDNEY (MNI) - Australian retail sales edged higher in January, although

till coming in at the lower end of expectations. Here are five things of

interest in the release by the Australian Bureau of Statistics.

Stagnating sales. 

The market had been expecting a modest jump after a weak December and the 0.1%

increase in January sales underlines the issues in the cooling Australian

economy. The market had been expecting a rise of 0.3%, following a sharp 0.4%

fall in December.

Rate cut pressure. 

The disappointing retail sales figures followed weak Q4 GDP data, showing 0.2%

growth in the period. Reserve Bank of Australia Governor Philip Lowe has all but

ruled out a rate rise this year, and the Bank is now likely to ponder the need

to cut official rates from the current record low 1.5% to stimulate the

faltering economy.

Discretionary spending flat. 

Spending on non-food categories is eyed as a guide to consumer sentiment, but

has only increased by 1.7% year on year, the lowest annualised result since

October 2017.

Department Stores in trouble. 

Department store retailing continues to struggle against online competition, and

sales fell by 2.1% on a monthly basis. The best performing categories were food

retailing and cafes/restaurants, both of which gained 0.3%.

Online sales strong. 

The online channel continues to grow as a percentage of total retail turnover,

improving to 5.6% in January. The ABS splits this category into "pure play

online" and "multi channel online", and the data shows that multi-channel

retailing is increasing at a faster rate, comprising 3.7% of all sales. Pure

play online rose 1.9%.

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com

--MNI Sydney Bureau; +61 405322399; email: lachlan.colquhoun.ext@marketnews.com

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