Australia’s retail sales likely grew marginally in May on rebound in food sales

Australia’s retail sales are likely to have expanded slightly in May on recovery in food sales. In the initial four months of 2016, Australia’s nominal sales have grown weakly; however, that shows the price trend rather than trend in volume. In the past year, sales of food have been noticeably weak; not on account of lower prices as a result of the price wars waged by country's supermarkets.

Food sales growth in April was just 2.4 percent, as compared with the non-food growth of 4.5 percent. The divergence in the growth has become quite evident in the recent months. Food sales rose just 0.1 percent three month-on-three month to April, whereas non-food sales grew 0.9 percent.

This trend is likely to have reversed slightly, with food sales rebounding in May, noted Societe Generale in a research report. Meanwhile, non-food sales growth is expected to have decelerated, mainly due to slowing of apparel sales that have boomed in the last six months. In all, nominal retail sales growth is currently at a rate consistent with nominal disposable household income that rose 3.8 percent in the first quarter, added Societe Generale.