Recovery in food sales likely to have boosted Australia’s retail sales in July

Australia’s retail sales is expected to have stimulated in July, thanks to rebound in food sales. Retail sales are likely to have been more than reversed the 0.6 percent drop in June. According to a Societe Generale research report, the retail sales are expected to have grown 0.7 percent in July.

However, the underlying trend is anticipated to be slightly changed from the present pace of growth around 3.25 percent that is consistent with nominal disposable income growth.

Both the rates are low by historical standards; however, low inflation clarifies around half of that shortfall. Meanwhile, non-food sales might have remained flat following a sequential rise of 0.6 percent in June.

Sales of consumer goods and sales at cafes, restaurants, etc. are expected to be solid. However, following a huge rise in June, sales of apparel are expected to have declined, while the same applies less forcefully to department stores, noted Societe Generale.