Australian real retail sales fall q/q in Q1 2019 to weakest since September 2012

Australian retail sales grew 0.3 percent on a sequential basis in the month of March, coming above market expectations of a rise of 0.2 percent. The March figure is a sharp slowdown from prior month’s rise of 0.9 percent. The quarterly sales growth came in at 1.3 percent in nominal terms. However, in terms of volume, the real retail sales came in negative at -0.1 percent quarter-on-quarter, the lowest since September 2012. High food price inflation explains the divergence between nominal and real growth.

Retail volume growth has been lower than the long-term average for the last couple of years and has dropped on a year-on-year for the last few quarters. Volumes of household goods and department store goods dropped in the first quarter, while clothing and other goods both recorded a rise of 0.3 percent. In nominal terms, clothing rose 2.9 percent quarter-on-quarter and 5.9 percent year-on-year.

However, food prices are driving overall nominal growth. Food retailing and café, restaurants and takeaway food sales were the other strongest categories in nominal terms, noted ANZ in a research report.

Nominal growth in food-related categories were above average in the first quarter. Solid growth in price in food is driving these results, although both food related categories rose volumes in the first quarter.

Region wise, New South Wales saw the strongest rise in retail sales in nominal terms in the first quarter, but is still below the national average in annual terms. In New South Wales, retail sales rose just 2.7 percent in the last year, below the national average of 3.5 percent. In nominal terms, Queensland and Victoria recorded strongest growth at 5.3 percent and 4.7 percent year-on-year, respectively. New South Wales recorded a slight rebound with 1.6 percent growth, while Western Australia and Tasmania recorded negative nominal growth.

At 13:00 GMT the FxWirePro's Hourly Strength Index of Australian Dollar was neutral at 1.52146 while the FxWirePro's Hourly Strength Index of US Dollar was bullish at 74.6984 more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex