Australian Retail Sales: April 2022 - No points for second place

About the author:

Alexander Mees
Author name:
By Alexander Mees
Job title:
Co-Head of Research and Senior Analyst
Date posted:
30 May 2022, 8:00 AM
Sectors Covered:
Gaming and Retail

  • Retail sales in Australia continue to be resilient. According to preliminary data from the ABS, retail sales rose 0.9% month-on-month in April 2022. Sales were 9.6% higher than in March 2021, climbing to a record total of $33.9bn. Retail sales in April 2022 were 36.8% higher than in the lockdown-affected month of April 2020. This was the fourth month in a row of positive m/m sales growth, while the y/y rate of growth was the fastest in a year.
  • Two-thirds of retail categories were in positive growth on a month-on-month (m/m) basis. All retail categories grew positively on a year-on-year (y/y) basis. The best growth on both a m/m and y/y basis was in Eating Out and Clothing and Footwear. Every state except NSW saw positive m/m retail sales growth. The best growth was in Western Australia (+2.2%).
  • The strong growth in the dollar value of retail sales partly reflects inflation-driven higher retail prices, but increased consumer spending around the Easter holiday period was also a factor driving growth. The retail sales data continues to be at odds with the share price performance of anything and everything to do with the consumer discretionary sector. Forward looking? Or over-reacting?

I feel the need: Eating out and apparel categories grew fastest

All major retail sales categories were in growth in April 2022 compared to April 2021. The strongest y/y growth, however, was in Eating Out (+14.7%) and Clothing and Footwear (+14.7%).

On a m/m basis, these two categories were also the best performers (+3.3% and 3.1% respectively). This suggests that Australians were getting back to socialising in April after extended period of COVID lockdown.

I was inverted: Department stores and household goods in negative territory

The volatile department store sector was among the worst performing on a m/m basis in April (down 2.5%), having been the best performer in March.

Household goods, another strong performer in March, underperformed in April (down 2.7%). On a y/y basis, the slowest growth was in department stores (+5.4%).

Keeping up foreign relations: Australia outperforming UK and US

Accelerating retail sales in Australia in April contrasts with a very negative performance in the UK last month.

Retail sales there fell 6.1% y/y. The picture is rather different in the US, where sales growth accelerated slightly to +8.2% y/y, only just below Australia.

Figure 1: Australian retail sales growth compared to the US and the UK

Growth stocks have had a choppy ride since the onset of the pandemicRetail sales growth (y/y, sa) in the UK, the US and Australia. Source: ONS, US Census Bureau, ABS, Morgans.

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Disclaimer: The information contained in this report is provided to you by Morgans Financial Limited as general advice only, and is made without consideration of an individual's relevant personal circumstances. Morgans Financial Limited ABN 49 010 669 726, its related bodies corporate, directors and officers, employees, authorised representatives and agents (“Morgans”) do not accept any liability for any loss or damage arising from or in connection with any action taken or not taken on the basis of information contained in this report, or for any errors or omissions contained within. It is recommended that any persons who wish to act upon this report consult with their Morgans investment adviser before doing so.

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