Last month AMP’s Shane Oliver had said he expected a bounce in retail sales and this month his prediction proved to be correct. August retail sales increased by 0.4%, in line with market expectations and a reversal of the previously recorded figure of -0.1%. On a year-on-year basis, sales were up 4.5%, slightly up on July’s annual figure of 4.2%. UBS expects retail sales to grow at around 4%-5% and within that sees the pick-up in department store sales to 7.0%. It also sees a paring back of growth figures in the ‘dining out’ and household goods categories as ‘worthy of note’. Perhaps this is what Macquarie is referring to when it said, “The retail sector is in need of further stimulus to drive a broad based improvement in sales growth beyond selected categories.” Westpac said the real disappointment was around the household goods segment which rose just 0.2% as “this discretionary category is a key cyclical driver.”