MNI DATA IMPACT: Australian Retail Sales Stagnate in March

By Lachlan Colquhoun

     SYDNEY(MNI) - Australia's retail sales turnover at current prices fell 0.3%

in seasonally adjusted terms in March as sales stagnated after a surprise (and

upwardly revised) 0.9% jump in February, data released by the Australian Bureau

of Statistics Tuesday showed.

     There was a 0.1% quarterly fall in volume terms, indicating that slow

retail sales will again drag on national GDP. In quarterly terms, the decline

was the largest since the September quarter of 2013.

Other factors of note in the released include:

Factor in a rate cut? 

While the RBA surprised some in the financial markets Tuesday and left interest

rates on hold, weak retail sales and the impact on inflation will be a major

factor in future decision making. While the Bank did not cut rates, further

evidence of the economic slowdown, including in the retail sector, could force a

cut later this year.

Housing sector in doldrums 

Household goods retailing was in negative territory, down 0.6% for the quarter

as the ongoing fall in the housing sector continues to bite, with the impacts

now being felt across the economy.

Department stores in negative growth 

The Department Store sector has been under intense pressure from online

channels, and sales were off 1.5% after a 3.5% spike in February. February was

an atypical result after a 2.2% fall in January and a 1.2% dip in December,

evidence that the sector continues to struggle.

Cafe's and food in demand 

Sales at cafes, restaurants and takeaway food services posted the strongest

gains, up 1.4% in March. ABS inflation data has shown that food prices are

rising as a result of the ongoing drought, and this is being passed onto retail

consumers.

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

[TOPICS: M$A$$$,M$L$$$,MI$$$$]