Brocker.Org: Australia: Retail sales well below expectations in March – Westpac

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Matthew Hassan, Research Analyst at Westpac, explains that the Australia’s March retail sales report came in well below expectations although the detail points to weather as a major factor, the impact of Cyclone Debbie in particular.

Key Quotes

“Total retail sales dipped 0.1% in March vs expectations of a 0.3% rise. Sales had dipped 0.2% in Feb as warm weather, aggressive discounting and clothing store closures appeared to impact.”

“Inclement weather was expected to restrain sales with the March month featuring abnormally wet conditions over the major eastern states and Cyclone Debbie impacting Qld and parts of NSW late in the month.”

“That impact looks to have been more substantive, retail sales fell 1.3% in Qld. Sales across the rest of Australia rose 0.2%mth.”

“Q1 real retail sales also came in below expectations, rising just 0.1% vs consensus forecasts of a 0.5% gain.”

“Weather again appears to be a key factor: sales in Qld contracted 1%qtr while sales across the rest of Australia  rose 0.4%qtr.’

“Price discounting was not quite as aggressive as expected, the retail deflator rising 0.1% vs an expected 0.1% dip.”

“The impact of severe weather makes interpreting storetype results difficult with the event likely to have impacted different categories to varying degrees.”

“For Q1 as a whole though clothing was a notable drag with sales volumes falling 1%qtr. Cafes and restaurants recorded  subdued 0.1% rise while other segments rose 0.4%-0.6%qtr.”

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