Tuesday, June 18, 2024

Decline in retail sales growth continues

Australian retail turnover increased by a marginal 0.1 per cent in June 2016, seasonally adjusted, according to the latest Australian Bureau of Statistics (ABS) Retail Trade figures.

Total retail sales for June 2016 were $25 billion.

In seasonally adjusted terms, there were increases in clothing, footwear and personal accessory retailing (3.5 per cent), household goods retailing (0.3 per cent) and department stores (0.7 per cent). There were declines in food retailing (-0.6 per cent), cafés, restaurants and takeaway food services (-0.1 per cent) and other retailing (-0.1 per cent) in June 2016.

The trend estimate for Australian retail turnover rose 0.2 per cent in June 2016 following a 0.2 per cent rise in May 2016. Compared with June 2015, the trend estimate rose 3.1 per cent.

Online retail turnover contributed 3.4 per cent to total retail turnover in original terms.

The Australian Retailers Association is hoping this week’s interest rate cut will halt the year-on-year slide of retail sales growth, with ABS data showing growth for the year to June 2016 of 2.7 per cent.

Retail sales growth has been declining for the past six months, falling from a high of five per cent in June 2015.

ARA Executive Director Russell Zimmerman says the June figure represents a combination of several factors, most predominantly the lead-up to the federal election on July 2.

“Elections are notorious for causing lower consumer confidence and depressed sales, which appears to have been the case here,” Mr Zimmerman said.

“Unseasonably high temperatures across the nation, deflation and world events, such as the UK’s Brexit decision and fallout and the growing prominence of the upcoming US election, all took a toll on consumer confidence in June and, while some of these issues will cycle out in the next few months, there some retailers who are doing it tough at the moment.”.

Retailers in the Northern Territory and Western Australia particularly felt the pinch, with the lowest sales in at least five years. Sales declined by 1.3 per cent in the NT, while WA managed an increase of just 0.5 per cent.

Tasmania has maintained its sales comeback, with the largest growth of all the states and territories, at 4.6 per cent, followed by Victoria and the ACT with 3.9 per cent and 3.8 per cent growth respectively.

Following on from the trends of the past few months, household good suffered almost static growth of 0.8 per cent, while food, which is under significant pressure from competition and deflation, posted 1.8 per cent growth.

Department stores, however, will be rejoicing at their healthy 4.9 per cent growth following a period of stagnation in the past two years, while the clothing and footwear sector was the big winner, increasing sales by 8.9 per cent.

“There are some positive changes that have occurred since June and the ARA anticipates this will result in a return to the higher growth of 2015,” Mr Zimmerman said.

“The lowering of interest rates this week is predicted to boost confidence and provide consumers with more discretionary cash, and with the election now behind us and producing a clear result, we’re hopeful retail will bounce back to a healthier level of growth in the coming months.”

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