Australian retail sales slumped 0.5 per cent to a seasonally adjusted $20.46 billion in March from $20.55bn in February and rose from $20bn a year earlier, according to official national figures released today. Economists expected a 0.5 per cent rise in sales for March.

According to the Australian Bureau of Statistics, turnover fell in department stores by a huge 3 per cent. Food retailing, household goods retailing, other retailing, and cafes, restaurants and takeaway food services also experienced a slump. The fall in Australian retail turnover was driven by Queensland.

The Australian dollar declined for a fourth day after the unexpected drop in retail data, which fueled speculation the Reserve Bank will delay raising interest rates. The currency fell to as low as 107.07 US cents. It was recently trading at 107.13 US cents and at 107.64 cents just before the data release.

Australian National Retailers Association (ANRA) CEO Margy Osmond the sobering reality of the retail sectors’ struggle back to recovery has been bought home today with the release of retail figures showing a 0.5 per cent drop, despite a reasonably buoyant start to the year.

“While the retail figures for January and February showed signs of improvement, the March drop is a better reflection of what retailers are seeing in-store.

“Drawn out sales periods and rebuilding after the Queensland and Victorian floods accounted for much of the improved activity in the first part of the quarter – without that stimulus, retail figures have dropped. In fact, this result has eliminated any positive growth seen in the first two months of the year.

“Despite the Reserve Bank keeping the cash rate stable since November, the sector can anticipate slow growth, if there is any growth at all, in the coming months.

“The high inflation figures announced last week indicate the RBA may be making a case for interest rate rises sooner rather than later, but the retail community will continue to argue against any further imposts on the family budget, particularly while petrol and electricity prices continue to put pressure on family resources,” Mrs Osmond said.

She said the retail sector will watch the Federal Budget with interest next Tuesday.

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