By Swati Pandey
SYDNEY, March 6 (Reuters) - Australian retailers started the year on a grim note as shoppers stayed at home, discouraged by large bushfires in the country's southeast, even before the effects of the coronavirus epidemic take hold.
Retail sales fell 0.3% in January to A$27.63 billion ($18.27 billion), the Australian Bureau of Statistics (ABS) reported. That was weaker than the expected flat result from economists polled by Reuters, following a revised 0.7% fall in December.
The ABS said there was no apparent impact on retail sales in January from the coronavirus outbreak.
Instead, the month was dominated by the bushfires that ravaged large swathes of the country's southeast, with retailers across a variety of industries reporting fewer customers and interruptions to trading hours and tourism.
Every single category but food retailing showed falls in January.
Economists expect the impacts from coronavirus to become more evident in subsequent months.
"Disruptions to supply-chains are likely to reduce the amount of available stock for a range of goods, while households are likely to pull back on everything but the necessities," Callam Pickering, APAC economist for global job site Indeed, said. "Reduced tourism will also hurt."
Australia has recorded 60 cases of infection, including two deaths, and the numbers of locally transmitted cases are rising. weak private consumption comes despite three interest rate cuts by the Reserve Bank of Australia last year and government giveaways in the form of tax rebates. The RBA lowered its cash rate further to 0.5% this week. economists are even predicting Australia will see its first contraction in nine years in the current quarter.
"Uncertainty and fear are rarely a good combination. They certainly aren't good for economic growth," Pickering said. "The degree of uncertainty across the Australian economy is at its highest level since the height of the global financial crisis."
($1 = 1.5126 Australian dollars)