Retail sales growth is expected to slow as petrol prices rise from recent lows.
Cheaper petrol during summer and an interest rate cut in February had buoyed consumer sentiment, but this effect is being undone, a report by the Australian Food and Grocery Council (AFGC) and pallet maker Chep found.
"While the fall in petrol prices promised to significantly boost income available for discretionary spending, petrol prices in Australia have increased again since the start of February, unwinding much of the earlier fall," it said.
Their retail sales index, based on pallet movements, forecast annual retail sales slowing from four per cent during the March quarter to three per cent in the June quarter.
AFGC chief executive Geoffrey Annison said retail sales growth would depend on a stronger labour market, as the economy unwound from the mining boom.
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