Dollar drops on retail sales miss

Retail spending was largely unchanged in September, missing expectations of a 0.4pc lift.

Department store sales were up 2.1 per cent in the month. / AFP PHOTO / Daniel LEAL-OLIVAS

Australia’s retailers remain stuck in the doldrums, with no increase in consumer spending over September compounding two previous months of shrinking sales. Retail spending totalled $25.9 billion, seasonally adjusted, in September, according to latest Australian Bureau of Statistics data, with the flat result falling short of market expectations of a 0.4 per cent increase. The steady result follows revised declines of 0.5 per cent in August and 0.3 per cent in July, underlining the pressure on household spending that has been a constant worry for the Reserve Bank.

The Australian dollar has dropped sharply on the news, falling from US77.14 cents immediately before the 11.30am (AEDT) data release to US76.88c by 1.12pm (AEDT).

Sector-wise, performance was mixed in September, with department stores the best performers as sales rose 2.1 per cent in seasonally adjusted terms. Food retailing sales were up 0.6 per cent, while sales at cafes, restaurants and catering services also improved 0.3 per cent.

However, this was offset by a 0.4 per cent decline in household goods retailing, a 0.7 per cent fall in clothing, footwear and personal accessory sales and a 1.7 per cent drop in other retailers comprising of pharmaceutical, cosmetic goods, recreational goods and newspapers and periodicals.

The weaker-than-expected retail turnover will likely strengthen concerns that consumers are shying away from spending because of rising household debt and weak wages growth.

AAP