I am going to break an editors rule and give you the punchline at the beginning of this article - Australia's economic growth is rocketing along but incomes are not and as a result retail sales are soft. There, you've got the gist of it, but if you need a little more information, read on.
This week's Gross Domestic Product (GDP) figures show that Australia's economy is growing at 3.1% p.a., its fastest quarterly growth since March 2012. So the economy is churning out plenty of stuff (goods & services) but unfortunately Real Net Disposable Income fell 1.1%. Wages are currently growing at the slowest pace in around 2 decades.
Also out this week were retail sales figures and they show a relatively weak 0.2% growth in April. Supermarket and grocery store sales actually fell. Some commentators are suggesting that is because of the devaluing impact of the Woolworths/Aldi price war (Coles apparently isn't in that race).
Perhaps associated with that war, we saw specialised food retailers decline 1.1% and we note the announcement this week that specialty grocer, Jones & Co, have gone into receivership again. There were minor moves in other categories although when looking at one months performance their relevance is questionable.
So there we have it - Australia's economic growth is rocketing along but incomes are not and as a result retail sales are soft. - but we said that already.
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