Australia’s retail sales grew less than expected in April as consumers reduced their discretionary spending, flash data from the Australian Bureau of Statistics showed on Tuesday.

Retail turnover edged up 0.1 percent on a monthly basis, reversing a 0.4 percent fall in March. But the pace of growth was weaker than economists’ forecast of 0.3 percent.

“Underlying retail spending continues to be weak with a small rise in turnover in April not enough to make up for a fall in March,” ABS head of retail statistics Ben Dorber said.

“Since the start of 2024, trend retail turnover has been flat as cautious consumers reduce their discretionary spending,” said Dorber.

The ABS is set to release detailed retail turnover data for April on June 4.

Data showed that turnover in most non-food related industries increased in April.
Other retailing, which gained 1.6 percent had the largest rise this month, followed by household goods retailing with 0.7 percent growth.

Meanwhile, clothing, footwear, and personal accessory retailing fell 0.7 percent.

“The relatively earlier Easter and the different timing of school holidays across the country meant we saw some added volatility in turnover in March and April,” Dorber added.

Food-related spending showed a mixed picture. Food retailing dropped 0.5 percent, while there was a small rise of 0.3 percent in cafes, restaurants and takeaway food services.

Retailers reported that spending on alcohol dropped off as consumers brought purchases forward into March and they increasingly opted for cheaper alcoholic products.

The consumption growth will probably remain weak into the second half of the year, which should help to lower inflation further, Capital Economics’ economist Marcel Thieliant said.

The Reserve Bank of Australia is expected to only start cutting interest rates at the beginning of next year, while the prolonged weakness in consumption opens the door for an earlier rate cut, the economist noted.