Australian retail sales growth was steady in July, undershooting the consensus estimate of 0.3%. The July result comes after sales notched consecutive gains of 0.5% in May and June during the end-of-financial-year sales. Annual growth moderated from 2.9% to 2.3% - still a relatively resilient pace given the headwinds households have faced, albeit inclusive of the effects of strong population growth and retail price inflation.
Retail sales in July came in at $36.2bn, the level unchanged on the prior month's total. Headline sales growth was flat as a 0.2% rise in food sales was offset by a 0.1% decline in spending across the discretionary categories. The decline in non-food sales comes after a 0.6% rise in the June quarter that was supported by discounting by retailers for end-of-financial year sales.
Within non-food sales, declines in July were posted in clothing and footwear (-0.5%), department stores (-0.4%) and cafes, restaurants and takeaways (-0.2%). Household goods - the major beneficiary of the boost from end-of-financial-year sales - saw growth flatline in July, with other retailing also recording no growth.
Retail sales growth was weak to subdued across the states in July. The strongest pace of growth is in Western Australia (0.2%m/m, 4.6%yr), with the state still well above all others on a pre-Covid comparison. The tone was lacklustre in the two major states, which account for a little over half of retail spending nationally: New South Wales -0.2%m/m, 1.2%yr and Victoria 0.1%m/m, 2.3%yr.
