Revised figures put the kibosh on retail recovery
Wallets and purses are tightly shut, the credit cards locked away.
Retail sales figures released on Wednesday confirmed what every shopkeeper and salesperson has known and feared for some time, that consumers are keeping their hands in their pockets.
Australian Bureau of Statistics figures show retail turnover barely raised a pulse in May, gaining only 0.1 per cent, seasonally adjusted, to be well below economists' forecasts of a 0.3 to 0.4 per cent lift.
If that wasn't bad enough, the bureau has revised down the previous two months. April is now recorded as a 0.1 per cent decline from a 0.2 per cent gain, while March is now reported as a 0.6 per cent fall in sales versus a previously reported 0.4 per cent decline.
Over the year retail turnover is up just 2.3 per cent.
"The broader picture is that while consumers are spending, they are selective with where they spend their money. And retailing has been missing out," said CBA economist Gareth Aird.
"In particular, the retail sector has had to compete against consumers spending a greater proportion of their disposable income on overseas holidays, which have been made cheaper by a strong dollar."
Adam Boyton, chief economist at Deutsche Bank, said the fresh data suggested the "recovery" in retail remained very weak with spillover through the economy from lower interest rates quite patchy.
"Indeed, retail turnover is now lagging the trend in higher housing finance. While we expect a pick-up in housing activity to eventually spill over into the retail sector, the lag between the two will contribute to a soft demand pulse over the near-term and should help, at the margin, to see a rate cut from the RBA over the coming months."
The largest contributor to the small rise in May 2013 retail sales was other retailing (pharmaceutical, cosmetic and toiletry goods), up 0.3 per cent, followed by food retailing (0.2 per cent), department stores (0.8 per cent) and clothing, footwear and personal accessory retailing (0.4 per cent). These rises were offset by falls in cafes, restaurants and takeaway food services (down 0.6 per cent) and household goods (0.3 per cent).
Some retailers and businesses exposed to discretionary spending have issued profit warnings over the past two months.
Last week women's fashion chain Noni B said it would slide to a full-year loss of as much as $4 million after a review of its goodwill triggered a substantial non-cash write-down.
It was quickly followed by furniture maker Nick Scali, which warned that orders had weakened in the fourth quarter, and Patties Foods, which said soft sales would result in a full-year profit drop of 15 per cent.