Retail in Asia

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Australia retail sales weak despite May rate cut

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The value of retail sales across Australia rose just 0.2 per cent in May, seasonally adjusted, despite the Reserve Bank of Australia’s rate cut that month.

The growth rate was slightly better than April’s revised 0.1 per cent, but fell short of economists’ forecasts of 0.3 per cent. Some had predicted a sharper pick-up.

The Australian Bureau of Statistics said on Tuesday turnover at food and “other” retailers – which includes pharmacists, news agencies, book shops and sports stores – rose 0.7 per cent and 1.4 per cent, respectively, while cafes, restaurants and takeaway outlets were ahead 0.3 per cent.

Sales at department stores were flat, and turnover in household goods and clothing and footwear dropped more than 1 per cent month-on-month, although the latter category may improve with the colder weather, say economists.

The worse than expected retail result added to a wider than forecast trade deficit for May, of $2.22 billion, to push the Australian dollar down about 0.4 per cent, to just below US75¢.