Daily Commentary BY THE CURVE TEAM –

Retail Sales Remain Choppy

22nd of February, 2021

January retail sales again reflected the constantly changing environment for consumers.

January retail sales were up 0.6% for the month. Part of the dynamic was Brisbane’s 3-day lockdown, which saw their sales down 1.5%.

NSW was up 1% following the unwinding of lockdowns. The overall numbers mean the 4.1% decline over December was not recouped.

In February, Victorian and Western Australian lockdowns should weigh on sales. They remain 10.7% higher than last year though.

Another factor that should impact retail sales is the beginning of the vaccine rollout in Australia. A successful vaccination program should end the need for lockdowns.

It may not be a straightforward benefit to retail sales though. Economies opening up and not subject to lockdowns may mean consumers switch to spending on services rather than retail.

A vaccine which opens up the economy will also mean case numbers will likely go above zero as the vaccine is not 100% effective, which could deter a portion of the population from getting out and about to spend.

However, the base case of a vaccine rollout should see people draw down on their large savings and spend more at the aggregate.

This week construction work done and wage growth for Q4 are released on Wednesday. This is followed by private capital expenditure for Q4 released on Thursday and private sector credit growth for January released on Friday.

Josh Stewart

Associate - Money Markets