MNI ANALYSIS: Australia Retail Data Shows H'Hold Spend a Worry

--Retail Sales Shows No Growth In Each of 3 Months to September

     SYDNEY (MNI) - Australia's retail sales was flat month-on-month in

September following two months of decline, marking the first quarterly drop

since 2004. 

     In volume terms, retail sales rose just 0.1% q/q in Q3, an outcome slightly

higher than the MNI survey median forecast but the smallest increase in four

quarters.

     The weak data means the Reserve Bank of Australia will remain concerned

with the outlook for household consumption and keep the cash rate on hold for

longer. For now, any downside risk might be mitigated by the stronger outlook

for construction and employment.

     Data published by the Australian Bureau of Statistics Friday show retail

sales was flat m/m in September compared with a 0.5% fall in August and a 0.3%

decline in July. The latest outcome was mainly due to a 0.4% fall in household

goods retailing and a 0.7% drop in clothing and accessories, which was offset by

a rebound in food categories. 

     Overall, in the three-month period to September, the weak performance was

due to declines in the household goods retailing as well as the clothing and

accessories categories in each of the three months, suggesting households remain

cautious with their discretionary spending. The last quarter to show such a weak

retail sales outcome was in the last quarter of 2004, when sales fell in October

and November, and were flat in December.

     In trend terms, retail sales were flat in each of the last three months.

     In volume terms, retail sales slowed sharply in Q3 due to a 1.6% decline in

household goods retailing, a 1.4% fall in department stores and a 0.7% fall in

cafes and restaurants. The 1.6% q/q fall in household goods retailing was the

first decline in five quarters.

     Below is table for Retail trade data for September:

                                           September                      August

--------------------------------------------------------------------------------

                                  (M/M %, seasonally          (M/M %, seasonally

                                           adjusted)                   adjusted)

Retail Sales                                     0.0     -0.5(revised from -0.6)

                                 +0.5 (range +0.2 to

MNI Median                                     +0.7)

Food Retailing                                  +0.6                        -0.4

Household Goods                                 -0.4                        -1.0

Clothing, Footwear etc                          -0.7                        -0.3

Department Stores                               +2.1                        +1.2

Other Retailing                                 -1.7                         0.0

Cafes, Restaurants,

Takeaways                                       +0.3                        -1.1

     Below is table for Retail trade (volume) data for August:

                                                   Q3                         Q2

--------------------------------------------------------------------------------

                                   (Q/Q %, seasonally         (Q/Q %, seasonally

                                            adjusted)                  adjusted)

Retail Sales (Volume)                            +0.1         +1.5 (no revision)

MNI Median                         0.0 (-0.3 to +0.4)

Food Retailing                                   +0.9                       +0.9

Household Goods                                  -1.6                       +2.1

Clothing, Footwear etc                           +0.7                       +2.5

Department Stores                                -1.4                       +3.3

Other Retailing                                  +0.4                       +2.0

Cafes, Restaurants,

Takeaways                                        -0.7                       +0.6

--MNI Sydney Bureau; tel: +61 2-9716-5467; email: sophia.rodrigues@marketnews.com

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