Retailers have long bemoaned the current conditions in Australia, with many citing enhanced competition from online sellers as a core issue the sector is facing. However, in March, the retail sector managed a somewhat surprising comeback after many analysts suggested the industry would continue to struggle.

Data from the Australian Bureau of Statistics suggests retail sales grew 3.7 percent to AU$21.23 billion (US$21.15 billion). Even after inflation, this is still a substantial gain and mirrors the revival of other sectors as well, such as private house building.

Some economists were quick to attribute the gains from normalizing food prices, rather than sector-wide resurgence.

"Heavy discounting in food prices through the quarter in a flat economy looks to have played a role here," Annette Beacher, head of economic research at TD Securities based in Singapore, told The Wall Street Journal. "We know that food prices collapsed in the quarter and that seems to be where all the retail demand is emerging."

Many Australian retailers blame the lack of importation laws for the weak sector. Consumers can simply pay less expensive prices on foreign retail websites because there is no legislation preventing this practice.

This entry was posted by Retail Pro on Thursday, May 10th, 2012 at 9:24 am .