News

Australia reports increase in February retail sales

April 3, 2012

Australian retail sales increased last month, led by gains at department stores and newsstands in an economy driven by mining investment, according to Bloomberg.

Sales climbed 0.2 percent from a month earlier, when they increased 0.3 percent, according to the Bureau of Statistics. The result matched the median forecast in a Bloomberg News survey of 22 economists. The figure hasn't decreased for eight months.

Reserved spending is allowing Australia's biggest resource investment to expand since the 1850's Gold Rush without increasing inflation. Reserve Bank of Australia Governor Glenn Stevens has kept the benchmark interest rate unchanged at 4.25 percent this year, after cutting it twice last year as job growth stalled and house prices slumped.

The release "shows more of the same softness that we've been seeing for a while now," Ben Jarman, a Sydney-based economist at JPMorgan Chase & Co., said in the story. Jarman predicts that the central bank will keep borrowing costs unchanged for the rest of the year.

The data showed spending increases on newspapers, books and pharmaceutical products; they rose 1.8 percent, and consumers spent 0.7 percent more at department stores and 0.3 percent more on food. They also spent 1.4 percent less on clothes and footwear and 0.7 percent less at cafes and restaurants.

From the story:

Paul Zahra, chief executive officer of David Jones Ltd., Australia's second-largest department store chain, plans to increase the number of online product lines tenfold, to give a bigger range than Macy's Inc., in an attempt to win back customers.

"As households look to save more of their income, they are shifting what they do spend away from conventional shop-front retail and towards consumption of services and online," Jarman said.

Read more about consumer behavior.