A bad miss by economists and analysts who completely underestimated the solid 0.8% rise in retail sales in February (seasonally adjusted). But car sales fell again in March to be down in the first three months of the year.
It was the highest monthly rise since November 2017 when a rise of 1.3% was reported.
The much stronger result left annual sales growth of 3.2%, the fastest increase since October last year.
The market had been looking for a 0.3% rise after the weak 0.1% rise in January, but that was too meek a guess.
Seasonally adjusted retail spending was $27.27 billion in February, according to the Australian Bureau of Statistics (ABS) data released on Wednesday.
The surprise growth was driven by food sales (up 0.8%), department stores (3.5%, household goods (1.1%), and clothing and apparel sales (1.6%).
These (with the exception of food sales) have been weak points in retailing in recent months.
Spending at cafes and restaurants fell 0.5% but takeaway sales grew 0.2%, the ABS noted.
Tasmania was the only state or territory where sales fell in February (down 0.7%).
The ACT saw the strongest performance with sales up 1.7%, followed by Queensland and the NT (1.4%), Victoria (0.8%), South Australia, and NSW and WA (0.6%).
Car sales have slowed for the third consecutive month this year, down 7.1% overall sales decrease in March over March 2018.
That was after sales dropped by 9.3% in February and 7.4% in January compared to the previous year’s data. Quarter on quarter sales were down 7.9%.
Passenger vehicle sales fell by 19.7% or 7,121 vehicles.
CEO of the Federal Chamber of Automotive Industries Tony Weber said in a statement the industry was seeing a “cautious consumer approach at the moment”.
“This is not surprising given the number of economic headwinds in the Australian market,” Mr. Weber said.
South Australia and Tasmania were the only two states to counter the trend, reporting solid growth and increased vehicle sales of 9.4% and 6.2% respectively.
The car sales fall will play into the Reserve Bank’s views on weak consumption, but the rise in retail sales won’t have an impact unless its repeated several times in coming months.
