Australian retail turnover slumped in June, falling 0.8% month-on-month according to the latest retail figures from the Australian Bureau of Statistics (ABS).
That marks a 2.3% increase on the same time last year.
The month-on-month drop was spurred by decreased spending at department stores (down 5%), other retailing (down 2.2%), and footwear and personal accessory retailing (down 2.2%).
“Retail turnover fell sharply in June due to weaker than usual spending on end of financial year sales,” ABS head of retail statistics Ben Dorber said.
"This comes as cost-of-living pressures continued to weigh on consumer spending."
Australia's total seasonally adjusted retail turnover came to $35,190 million in June, down from close to $35,525 million in May.
The retail trade read is the last notable piece of data to land before the Reserve Bank of Australia (RBA) board's August meeting, to be held on Tuesday.
It follows the release of the quarterly consumer price index (CPI) read, published on Wednesday.
It found headline inflation continued to fall in the June quarter, coming in at 6% – down from its peak of 7.8% in the December quarter.
The CPI read took experts by surprise, with major bank economists previously predicting the annual inflation rate to come in as high as 6.3%.
Though, those at NAB were on the money on Wednesday, but they weren’t so fortunate today.
NAB, along with Westpac, forecasted retail spending to fall 0.2% in June, following the recent release of NAB’s monthly online retail sales index and quarterly Business Survey.
The former found online retail sales fell 4.1% month-on-month in June, on a seasonally adjusted basis, but were relatively flat year-on-year, recording growth of 0.1%.
Leading the downturn in the bank’s data was online spending on takeaway food, personal and recreational goods, and homewares and appliances.
The latter found the outlook for the retail sector had softened.
Meanwhile, CBA had tipped retail sales to be flat for a second consecutive month and ANZ predicted a 0.4% uptick.
Both expected end-of-financial-year sales to bolster the figure.
Australia awaits RBA August decision
Today’s release from the ABS could also have implications for the Reserve Bank of Australia’s August meeting.
The RBA board will meet on Tuesday and is expected to decide whether to hike the cash rate or to extend its pause, holding it at 4.1%.
CBA tipped the central bank to hike by 0.25%, bringing the cash rate to a peak of 4.35%, earlier this week.
However, it refused to lock in its prediction until hearing of the retail trade print.
Westpac also thinks rates will be lifted in August, while ANZ and NAB are expecting a pause.
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