 was bullish about the December trade figures, but others struck a more downbeat tone.){kind=link}
‘Reputable trade’ or ‘dismal run’?
The Australian Retailers Association (ARA) was bullish about the December trade figures, but others struck a more downbeat tone.
Responding to the Australian Bureau of Statistics’ (ABS) latest data, the ARA says it represents “a reputable Christmas trade”.
The figures show a 2.75 per cent total year-on-year growth in 2018, compared with 2.49 per cent in 2017.
However, there was also a -0.38 per cent drop in month-on-month figures. This has led other industry commentators to take a much gloomier view.
Figures close to forecasts
ARA Executive Director Russell Zimmerman says that although the ARA and Roy Morgan predicted a 2.9 per cent increase in pre-Christmas sales from November 9 to December 24, 2018, the year-on-year figures released this week are close to the estimated forecasts.
“The month-on-month figures from the ABS display a conservative December trade,” he said. “But retailers tend to focus on year-on-year growth for a more concise depiction of how their stores are faring.”
December saw year-on-year growth across the following categories:
- Food retailing (3.98 per cent)
- Cafés, restaurants and takeaway (2.92 per cent)
- Clothing (3.21 per cent)
- Pharmacy/cosmetics (5.03 per cent)
- Other retailing (7.84 per cent).
“Food retailing performed exceptionally well this season,” Mr Zimmerman said, adding: “Pharmacy and cosmetics was a real highlight in the December figures, as expected … in the lead-up to Christmas.”
The weakest links?
Department stores recorded a 0.53 per cent year-on-year jump. But the ARA described weakness in the electrical (-2.9 per cent), newspapers and books (-6.31 per cent) and recreational goods (-4.81 per cent) as “sobering”.
“Although disappointing,” said Mr Zimmerman, “it’s important to note that there are a variety of factors that have contributed to these soft figures.
“These include the decrease in consumer sentiment caused by rising household costs and low wage growth, which continue to plague the industry and overall economy.”
Year-on-year growth hits three per cent
But there were also some bright spots in the ABS figures.
Notably, the retail industry recorded an average year-on-year growth of three per cent for the 2018 calendar year. This compares to 2.76 per cent for the previous year, thanks to a significant improvement in the apparel category.
“Despite the ominous commentary announced by multiple media outlets regarding a subdued Christmas trade, (these) figures prove that there has been reasonable growth across some categories,” Mr Zimmerman said.
A ‘dismal run’ for retail?
One such “ominous commentary” came from Chief Australia Economist for BIS Oxford Economics Sarah Hunter, who took a less rosy view than the ARA.
“Retail’s dismal run continued in the December quarter, with retail turnover increasing just 0.1 per cent in volume terms,” she said.
“The decline in December was seen in all states apart from WA, with ACT, Victoria and NSW leading the way.
“The data confirms that the strength seen in consumer in the first half of 2018 has definitely waned.”