Australian retail sales climb less than expected in December

Australian retail sales climb less than expected in run-up to Christmas

Feb. 7 (BusinessDesk) – Australian retail sales rose less than half the forecast pace in the run-up to Christmas, as weaker trading at department stores offset increased sales of clothing and footwear.

Sales rose 0.2% in December, seasonally adjusted, from 0.4% the previous month, according to the Australian Bureau of Statistics. A gain of 0.5% was expected, according to a Reuters survey.

Shares of retailers including Myer Holdings, Australia’s biggest department store, David Jones and Harvey Norman dropped on the ASX today. Myer led the slide after saying fiscal 2011 earnings would fall as much as 5%, versus an earlier forecast of up to 10% profit growth. Reserve Bank Governor Glenn Stevens cited a cautious household sector among factors that prompted him to keep interest rates on hold last week.

“The surprise appears more to do with aggressive price discounting than weaker than expected volumes,” economists at Westpac Banking Corp. said. “Monthly sales remain below their September peak and are in outright trend decline in monthly terms.”

The government statistician warned against reading anything into signs of impact from the Queensland floods even though they began in late December.

Data collection, particularly in Queensland, was affected by the floods, with a lower-than-usual to the survey in that state.

“It is expected that the first significant economic impact of this and floods in other states will be reflected in the January 2011 release of this publication,” the bureau said in its release.

Sales at department stores declined 1.2% in December, while food retailing turnover dropped 0.5%. Household goods retailing rose 1.5% and clothing, footwear and personal accessories jumped 2.7%. Cafes, restaurants and takeaway food outlets reported a 0.8% rise.

Australia’s economy grew 0.2% in the third quarter, the latest figures available, the slowest pace in two years.

(BusinessDesk)

© Scoop Media