Is this a signal from retailing that the bad publicity about the budget and taxes, plus the corruption scandals in NSW, are starting to erode confidence?
The March data on retail trade from the Australian Bureau of Statistics suggests that.
In fact the strong growth seen at the start of the year of 1.1% (seasonally adjusted) has slowed sharply to just 0.1% in March – that was the slowest monthly growth figure for 11 months.
Even the trend series is showing a slowing from 0.7% (originally reported, now 0.6%) in January to 0.5% in March.
That has coincided with an easing in consumer and business confidence (the Westpac and NAB surveys, both which are updated next week).
Market forecasts had suggested growth of 0.4%, seasonally adjusted in March, after a revised 0.3% (0.2% originally) increase in February.
The March figures took the annual rate of growth to 5.7%, the Bureau of Statistics data showed, down from the 6.2% rate seen in the year to January.
The increase took the first-quarter growth sales volume to a seasonally adjusted 1.2%, after a 1.1% lift in the previous quarter. That should be positive for March quarter GDP growth.
The increase in spending on eating out was weighed down by a fall in sales for household goods, clothing and at department stores.
Retail sales disappoint
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The ABS said that turnover rose in food retailing (by 0.5%) and cafes, restaurants and takeaway food services (up a solid 1.1%). These rises were partially offset by falls in other retailing (down 1.1%), household goods retailing (-0.3%), clothing, footwear and personal accessory retailing ( also down 0.3%) and department stores (-0.1%).
Turnover rose in NSW (up 0.8%), Queensland (0.2%), Tasmania (0.8%) and the Northern Territory (0.1%). These rises were partially offset by falls in Western Australia of 0.9%, South Australia down 0.8%), Victoria down 0.2%) and the Australian Capital Territory (-0.8%).
The big fall in the ACT, while only a month, came amid rising concerns in Canberra at the size of the budget cuts to the Federal public service.
The ABS said the trend estimate for Australian retail turnover rose 0.5% in March 2014. This follows an 0.6% rise in February 2014.
Through the year, the trend estimate rose 6.1% in March 2014 compared to March 2013. So it’s still solid, but it was closer to 6.7% at the start of the year.
Some of the retailer updates have revealed winners and losers, with the biggest winner being Kathmandu (KMD), which not only reported solid third quarter sales, but saw its shares hit an all time high of $3.77, up 26c, or more than 7.4%.
It said yesterday that third quarter sales grew by nearly 4%, not quite as good as David Jones (DJS) 4.1% rise, but a lot better than the small fall reported by Myer (MYR), the big fall produced by Target and the 0.4% rise reported by Kmart.
Kathmandu, which specialises in outdoors clothing, recorded sales of $NZ93 million ($A86.58 million) in the three months to April 27, up 3.6% from the same period a year ago.
Same store sales were down 0.6%, but in constant dollar terms (designed to smooth out currency moves, such as the sharp appreciation of the NZ dollar in the past few months) same sore sales were up 8.2% in the quarter, compared with a year ago.
KMD 1Y – Kathmandu still climbing
The company said it had a strong trading performance because of the later Easter this year, and the change to cooler weather in Australian and New Zealand.
The update was revealed at the investment conference sponsored by Macquarie yesterday.
The company has previously forecast profit growth in 2013-14, and yesterday indicated that it was confident of a strong performance in the year to June.
