Australian consumers are not confident about their finances, while competition among retailers is hotting up and driving prices lower. That’s the conclusion economists are drawing from the latest batch of retail sales figures released by the Australian Bureau of Statistics.
Sales figures shrank by 0.1% over the month or 2.7% for the 12 months to the end of February. These numbers were less than market expectations of 0.3% for the month and they do not compare favourably with January’s figures of 0.4% (month) and 3.1% (year).
Jo Masters, senior economist at ANZ said, “Consumer confidence around personal finances has slipped in recent months and together with intense competition suggests that retail sales may remain lacklustre for some time.”
Westpac economist Matthew Hassan thinks the figures also gave clues about consumers’ current priorities. “Indeed whereas basic food retail sales were up 0.3%, non-food retail as a whole was down 0.4%. That pattern is a signature sign of consumer belt-tightening with discretionary spend reined in and “switching” giving support to staples.” He also referred to “particularly weak” sales of clothing, footwear and furniture.