In what could be an encouraging sign for Australian retails news overnight reveals that the US market that has higher inflation than Australia, has seen retail sales in October increase more than what was expected.
According to the US Commerce Department Retail sales rose 1.3% last month after being unchanged in September.
Economists polled by Reuters had forecast sales rising 1%. In the USA retail sales are mostly goods and are not adjusted for inflation.
Analysts believe that Wednesday’s data raised cautious optimism the US economy could avoid an anticipated recession next year or just experience a mild downturn. The same sentiment has been expressed in Australia with CE and appliance retailers punting on a strong Black Friday and weaker Boxing Day sales revenue.
Currently the channel is heavily stocked with
goods with several distributors such as Tempo who predominantly sell into the value and affordable premium market reporting that they are still getting “consistent” demand from retailers and that sales have not fallen similar to premium products.
The solid retail sales reported by the US Commerce Department and signs of a slowdown in inflation raised cautious optimism the US economy could avoid an anticipated recession next year or just experience a mild downturn.
Another plus is that the Australian dollar has risen 10% just one month which reduces the possibility of further price rises.
Since October 16 when the Australian dollar fell below US62 cents, it has rebounded to US68c amid improving prospects for inflation, interest rates and China’s economy.
Despite the rise some economists are claiming it could slip back below US60c by early 2023, back in April 2022 the dollar was sitting at $0.76.
KPMG chief economist Brendan Rynne the weakness this year had “nothing to do with Australia.”
Also overnight the South African owned David Jones reported that turnover and concession sales increased by 55.3 per cent in the 20 weeks ending on November 13th
The retailer said that trading space in their stores was reduced by a further 3.7 per cent relative to the prior period.
David Jones’ online sales contributed 15.8 per cent of total sales, down 28.9 per cent on the prior period, as customers returned to shopping in stores following the end of lockdowns and travel restrictions.
