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  • Writer's pictureFlow Australia

Retail sales digs in with hotter than expected growth

The new iPhone model, the start of an energy-saving rebate program and unseasonably warm weather all helped prop up retail sales numbers last month.

Australian retail sales grew by a robust 0.9 per cent last month as warmer-than-usual weather spurred more spending on gardening and other outdoorsy goods.

The September result came in above market expectations of a 0.3 per cent increase and stronger than the 0.3 per cent lift in the month prior. 

In July, retail trade as tracked by the Australian Bureau of Statistics grew 0.6 per cent.

ABS head of retail statistics Ben Dorber said there were several factors underpinning the strong September lift. 

"The warmer-than-usual start to spring lifted turnover at departments stores, household goods and clothing retailers, with more spending on hardware, gardening, and clothing item," Mr Dorber said.

He said the the release of the new iPhone and the introduction of an energy saving appliance rebate program in Queensland helped support household goods retailing. 

There was growth recorded across most categories, with department stores lifting the most, by 1.7 per cent.

This was followed by a 1.5 per cent uptick in household goods retailing and a 1.3 per cent lift in the category known as "other retailing". 

Though the September result was the largest since January, lacklustre spending for most of the year means underlying growth in retail turnover remains historically low. 

"Retail turnover in trend terms is up only 1.5 per cent compared to September 2022 - the smallest trend growth over 12 months in the history of the series," Mr Dorber said. 

When accounting for strong population growth and higher prices, retail turnover numbers point to a more cautious consumer. 

The insights into consumer spending patterns over the month will be of interest to the Reserve Bank as it gets to the pointy end of its interest rate hiking cycle aimed at bringing down high inflation. 

A firmer set of inflation data last week has set the scene for a live cash rate decision in November that could result in another 25 basis point increase or a fifth month on hold.


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