Victorian retailers continue to struggle with the value of sales, down by 0.4 per cent in April after a 0.8 per cent drop in March. Over the past year, sales have risen by 0.6 per cent, despite the state adding almost 200,000 residents.
While NSW consumers opened their wallets in April, with sales up by a nation-leading 0.7 per cent, over the past year they have increased by just 0.8 per cent.
Callam Pickering, Asia-Pacific economist for job website Indeed, said retail spending in April was lower than for the entire March quarter, which itself was quite poor.
“This remains one of the weakest retail markets we have seen in Australia for generations, and that will certainly continue until at least mid-year,” he said.
AMP economist My Bui said the weak trend in retail spending showed no sign of abating, with the decline on alcohol spending and a step-down in food retailing indicators of the tough conditions.
She said that even with government assistance coming to many households in the second half of the year, inflation was on track to moderate.
Shares in JB Hi-Fi have fallen 12 per cent since early April.
“Consumer surveys are indicating that most consumers are still negative about buying major household items, 80 per cent of households aware of the upcoming tax cuts intend to save them, the labour market is weakening, and wages growth looks to have peaked,” she said.
“The lower inflation backdrop, soft economic growth and higher unemployment rate should allow the Reserve Bank to start cutting interest rates by the end of the year.”
KPMG chief economist Brendan Rynne said anecdotal discussions from various retailers suggested market conditions were tougher now than at the start of the year, with major household purchases being pushed back.
Publicly listed retailers such as Baby Bunting, JB Hi-Fi and Super Retail Group have this month all reported a drop-off in sales.
Figures from the bureau on Wednesday are expected to confirm price pressures are still strong, with the monthly measure of inflation tipped by markets to show it hovering around 3.6 per cent over the past year.
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