Statistics show that April retail sales rose nearly 1% on the back of the biggest drop in retail prices for 30 years. The sales rise followed a small increase in February and March.
Cafes, restaurants, and food services showed the biggest increase although discretionary sectors continue to be sluggish.
A Commsec Economist said - “The real winners have been those cafes, restaurants and food stores that have seen the largest increases – and cheaper prices have a lot to do with it.”
The Retailers Association has been calling on the Reserve Bank to cut rates for several months - and yesterday welcomed the retail sales growth – but also warned there is still a lot of weakness in discretionary categories.
We'll leave the final word to Westpac Chief Economist Bill Evans who said the report was a “bolt in the blue”, and even said the report was so good that it seems “hard to believe”, given the current state of consumer and business confidence surveys.
Watch this space.