The normalisation of retail sales continued through April, according to NAB’s Cashless Retail Sales Index, with the department store and household good sectors falling from their pandemic highs.
Year-on-year growth hit 23.4 per cent for cashless retail spending in April, NAB found, while month-on-month it grew 3.4 per cent.
And, while the bank’s economists remain positive for the upcoming ABS retail sales data, due to be released on Friday, they are becoming increasingly skeptical that retail growth can continue as it has been.
“With life in Australia currently very close to pre-pandemic ‘normal’ [and] sectors dependent on staying home falling away, the key question is to what extent sectors dependent on going out, such as clothing and footwear and hospitality, will replace them,” said NAB chief economist Alan Oster said.
“The Australian economy continues to outperform expectations… however, wage growth is yet to see a sustained uptick from 2020’s record lows.
“Ultimately, it will be difficult to sustain conditions in the retail sector without a wages lift.”
According to the Federal Government’s recent budget announcement, substantial wage growth is unlikely, however.