Coriolis Research director and retail analyst Tim Morris said a drop in Australian sales was not a surprise. Australian retail spending had been retracting for some time.

“The ‘lucky country’ avoided the global financial crisis, they sidestepped the whole thing, and five years later it’s catching up with them,” Morris said.

The Australian economy does not look set to regain momentum any time soon. The Australian dollar sank to a near three-year low against the greenback last week as the market continued to price in an eventual slowdown in stimulus from the United States Federal Reserve and weak Australian retail sales.

Retail sales rose 0.1 per cent in May from a month earlier, compared with a 0.3 per cent rise expected by economists. Sales for April were revised from a rise of 0.2 per cent to a fall of 0.1 per cent. Sales also fell in March.

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