Tuesday, March 2, 2010

ABS Retail Sales for January 2010 Alert: Stimulus hangover persists in January

•ABS retail sales rose 2% in January 2010 on pcp, using original ABS data. The
slowdown was expected as the retail sector continued to cycle the first round of
stimulus. Hardware and Clothing categories experienced the largest declines.
Citi’s Retail Sales Indicator of listed retail companies rose 1.5% in January 2010
compared to 3.4% in December 2009. This is below the broader retail sector.
Key points

•Supermarkets rose a modest 1.6% in January. While food inflation remains
subdued, the weak result also reflects a step-down in volume growth. Eating
out of home sales increased 8.7%.

• Department stores grew 1.2% in January, accelerating from the 3.2% decline
in the prior month. Our feedback suggests that some of the improvement
came as a result of strong clearance activity in January.

• Clothing sales declined 3.3%, continuing the slowdown from November 2009.
We expect the pace of decline to accelerate over the next six months.
Clothing specialties were the largest beneficiaries from the second round of
fiscal stimulus.

• Electrical sales rose just 0.2% in January. Although, sales improved on the
6.4% decline in December 2009, the flat result is coming off a weak baseline.
 Furniture also slowed this month, with sales rising 3.4% compared to the
10.8% growth recorded in December 2009. The category has been supported
by strong home purchase activity over the past 12 months.

• Hardware sales were down 3.3% in January 2010. However this is an
improvement to December which was down 11%. The strong slowdown over
the past two months indicates the large stimulus impact on this category.

ABS Retail Sales for January 2010 Alert: Stimulus hangover persists in January -

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