Retailers saw their goods flying out the door at the fastest pace in four years in the June quarter, but they had to offer some pretty steep discounts to achieve it.
- Every state except Victoria recorded a growth in retail sales in June
- Discounting helped stimulate household goods and clothing and footwear sales
- Restaurants and cafes sales +5pc since January, department stores sales -2pc
Retail volumes for the three months to July rose 1.5 per cent, compared to the glacial growth of 0.2 per cent in the first quarter.
However, it is likely the 0.1 per cent fall in retail price inflation over the period, rather than cashed up consumers willing to pay the full price, helped clear the shelves.
The Australian Bureau of Statistics also released retail sales figures for June, which saw growth of 0.3 per cent over the month.
While better than expected, they were a marked slowing from the average 0.8 per cent growth over April and May.
Over the year, retail sales were up 3.8 per cent.
Sales were reasonably solid across most categories, although department stores once again endured a tough month with another fall despite the inducement of heavy end-of-financial-year discounting.
Victoria was the only state or territory to record a drop in sales in June, but that was on the back of two very strong months previously.
The stronger June-quarter volumes should prove to be a positive for household consumption in the next round of GDP data, and offset some disappointment in yesterday’s trade data.
“It remains somewhat unclear what drove the surge in retail spending in April and May,” J.P Morgan’s Ben Jarman said.
Mr Jarman pointed to a number of factors such as the replacement of damaged goods after the Queensland storms, financial compensation being paid ahead of the energy hikes and significant discounting being offered in a very competitive retail environment.
However, Mr Jarman said he expected coming months to be softer given constrained household incomes and higher energy and mortgage costs on the way.
Retail trade has picked up since a soft start to the year, but is still growing below its long-term average. (Supplied: NAB)