"I don't think that consumers have suddenly woken up in December and suddenly felt completely confident again"
- Woolworths Ltd. Chief Executive Officer Grant O'Brien
Retail sales in Australia fell unexpectedly for the third consecutive month in December, posting the longest stretch of declines in 13 years, as consumers were reluctant to spend more amid a deteriorating employment outlook. According to the Australian Bureau of Statistics, retail sales dipped 0.2% in December A$21.4 billion ($22.2 billion), after a revised 0.2% in the preceding month. Analysts, however, expected a 0.3% gain. Annual growth in sales slowed to just 2.3%, less than half the pace that used to be considered normal, and came despite rate cuts in both October and December. The benchmark interest rate now stands at 3%, matching a 50 year low, as policy makers aim to stimulate industries outside of mining and encourage hiring.
"I don't think that consumers have suddenly woken up in December and suddenly felt completely confident again," said Woolworths Ltd. Chief Executive Officer Grant O'Brien in a media call Jan. 30. "There still is a lack of confidence in consumers and I think that will continue to be the case for some time."
"Weakness is fairly broad-based," said David de Garis, a senior economist at National Australia Bank Ltd. in Melbourne, which predicted the result and expects the RBA to cut the cash rate to a record 2.25% in the third quarter.
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