Australia’s total retail sales in the three months to February have expanded just 0.4% in nominal terms. This partially indicates soft sales of food; however, ex-food sales also grew just 0.5% in the same period. With the strong growth in employment, continuous upbeat wealth effects and strong real wage gains, recent data is believed to understate the growth pace, according to Societe Generale. Therefore, retail sales are likely to have recovered in March by 0.5% m/m, underpinned by a rebound in food sales, added Societe Generale. Other sectors are likely to have grown modestly; however, apparel component is expected to have reversed its strong gains recorded in the earlier four months.
Moreover, the country will also be releasing the inflation-adjusted retail sales data for the first quarter. The consumer price data was released recently. Weak price trends have definitely led to the soft growth in nominal sales. Food prices are expected to match the momentum of fourth quarter of 0.3% q/q. Meanwhile, apparel sector is expected to have performed quite strongly. Nominal sales in the segment have likely expanded 2% q/q, added Societe Generale.
On the contrary, consumer goods are expected to have grown just a bit, signifying slowdown of growth in real estate sector. Overall, real retail sales data are expected to indicate sustainable growth in consumer expenditure, said Societe Generale.
