Retail sales grow in February

Retail sales rose as expected in February but the sluggish growth suggests another tough year for the sector, analysts say.

Retail sales grew by 0.2 per cent in February following a 0.3 per cent rise in January, according to the Australian Bureau of Statistics.

The ABS says retail trade rose in the month to a seasonally adjusted $20.988 billion, compared to a downwardly revised $20.954 billion in January.

Economists polled by Bloomberg predicted a 0.2 per cent rise.

"This was in line with expectations," said Macquarie senior economist Brian Redican. "There was no sign of any improvement on February."

"It looks like another tough start to the year for the retail sector."

Mr Redican predicted that the Reserve Bank, which will decide on interest rates this afternoon, would not be surprised by the retail number.

Over the past year, the nation's retailers have been squeezed by a number of forces, including faltering consumer confidence, reduced spending by households and uncertainty about the economy's outlook. Also, the public's embrace of online shopping has put additional strain on the business models of established retailers such as Harvey Norman, Myer and David Jones.

Last month, David Jones said first-half profits fell 19.6 per cent from a year earlier to $85 million amid weaker demand and the switch by consumers to more online purchasing.

The retailer also warned full-year profits could be down by 40 per cent as it struggles to adjust to the changes in the industry.