Australia: Retail sales edge ahead - Westpac

Matthew Hassan, Research Analyst at Westpac, points out that Australian retailers reported a 0.3% lift in sales in October, in line with market expectations but better than Westpac's forecast of a 0.1% gain.

Key Quotes

“While sales growth is still not strong its looking a touch better than it did mid year, annual growth having lifted from 2.9% in June to 3.6% currently.”

“The detail shows a more uneven story. By store type, the October month saw a strong rise for clothing (2.6%mth) and a solid 0.6% gain for household goods but mixed results for 'small ticket' discretionary store types – 'other retail' up 0.5% but cafes and restaurants down 0.9%. Basic food posted a 0.2% rise.”

“Overall, the October retail sales gain is of some relief given yesterday's disappointing September quarter update on wider consumer spending. That said, the softer tone around some 'discretionary' categories and the slowing in NSW add a clear note of caution. Risks still look skewed to the downside as we head into the all important Christmas period.”