Q3 Retail Sales Suggests Some Improvement in Discretionary Spending, Although Caveats Apply

Australian retail sales volumes rose 0.2%q/q in Q3. This was stronger than expected (consensus -0.3%), although the Q2 dip was revised down a touch to -0.6%. This was the first rise in quarterly retail sales volumes since Q3 last year. In y/y terms we were still down -1.7% see the chart below.

• By industry, food retailing was -0.3%q.q (-0.9% prior). Household goods rose 0.8% q/q (-1.4% prior). Department stores rose 1.5%q/q (-1.5% prior), while cafes, restaurants were 0.4% q/q (-0.1% prior).
• These details suggest some improvement in discretionary spending but some caveats from the ABS apply from a broader macro standpoint.
• The ABS noted that "The rise in September was supported by lower price growth for retail goods, unusually warm weather, and special events like the FIFA Women’s World Cup.”
• Additionally stating, “Volumes are lower despite a period of strong population growth. On a per capita basis, retail volumes are down 4.0 per cent compared to this time last year, the largest 12-month fall in the history of the series,” (see this link for more details).

Fig 1: Australian Retail Sales Volumes

Source: ABS/ MNI - Market News International