The ABS just released a very disappointing set of data which showed that retail sales only grew 0.1% in July against the market’s expectations that they would grow 0.4%.
Compared to July 2013 seasonally adjusted retail sales are up just 1.9% which has to be making it hard for retailers across the spectrum to make ends meet.
What is really striking though is the absolute and almost complete collapse in the trend estimate of retail sales if we look at it on a year on year basis to 1.6%.
Take out the sugar hit of the federal government’s stimulus package back in the dark days of the GFC and retail sales growth has been in a sharp down trend for the past 5 or 6 years.
There are always positives and negatives by industry and in July the winners were household goods (+1.8%), clothing and footwear (+1.4%) and food retailing (+0.5%) but department stores collapsed 7.9% on the month.
Looking back over the past 2 years and there is now a clear down trend emerging in department sales, while food sales seem in a very gradual ascent and in some small sign that perhaps the RBA rate cuts are gaining traction somewhere household goods and clothing and footwear have improved – the former materially recently.
Clearly Australian households still prefer saving over spending.
Disclosure: Greg McKenna is an active currency trader and is currently short AUD.
Follow Greg McKenna on Twitter.
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