Food better than fashion as retail sales fall by an unexpected 0.4% in March: ABS

The latest ABS retail sales figures for March will disappoint retail property landlords, particularly those with a high proportion of fashion-related tenants.

Following a rise of 1.3% rise in February,  retail turnover fell by a seasonally-adjusted 0.4% in March 2013.

This was well below expectations of a modest 0.1% gain in March.

The largest contributor to the fall in March 2013 was clothing, footwear and personal accessory retailing (-4.2%) followed by household goods retailing (-1.5%), other retailing (-1.0%) and department stores (-0.1%).

These falls were partially offset by rises in food retailing (0.8%) and cafes, restaurants and takeaway food services (0.2%).

Over the longer term, the largest contributor to growth was food retailing (up 0.5% in trend terms). 

Through the year, Australian retail turnover rose 3.2% in March 2013, seasonally adjusted, compared to March 2012. 

The drop in retail sales come as inflation rose 0.3% in April after a 0.2% rise in March, according to the TD Securities–Melbourne Institute Monthly Inflation Gauge, leaving inflation 2.1% up for the year, well within the RBA's target inflation band of 2% to 3.%.

ANZ comments that the fall in March retail sales was likely impacted by the timing of Easter this year (and the associated seasonal adjustment difficulties), but that March retail sales were 2.2% higher than at the end of last year.

"Together with the improvements in house prices, these data suggest that some interest-rate sensitive parts of the economy are beginning to improve. However, despite better consumer confidence and spending, there has been no notable improvement in business conditions and the non-mining investment outlook remains soft," says ANZ.

The trend estimate for Australian retail turnover rose 0.4% in March 2013. This follows a rise of 0.4 per cent in February 2013. Through the year, the trend estimate rose 3.3% in March 2013 compared to March 2012.

Larry Schlesinger

Larry Schlesinger

Larry Schlesinger was a property writer at Property Observer


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