Australians are moving from the top shelf to the bargain bins of their local bottle shops as high inflation and the Reserve Bank’s aggressive tightening of monetary policy combine to leave the nation’s retail sector facing its worst outlook in generations.
The Australian Bureau of Statistics reported the value of retail sales lifted by 0.1 per cent in April, after a 0.4 per cent drop in March. Markets had been expecting a jump of up to 0.6 per cent in April. A key marker of discretionary spending, clothing and footwear, fell another 0.7 per cent in April after a 4.6 per cent drop in March. Over the past year, the value of this sector has fallen by 2.5 per cent.
Asia-Pacific economist for job website Indeed, Callam Pickering, said retail spending in April was lower than for the entire March quarter, which itself was quite poor. She said even with government assistance coming to many households in the second half of the year, inflation was on track to moderate.“Consumer surveys are indicating that most consumers are still negative about buying major household items, 80 per cent of households aware of the upcoming tax cuts intend to save them, the labour market is weakening, and wages growth looks to have peaked,” she said.
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