Figures from the Australian Bureau of Statistics indicate that the annual level of inflation in Australia has fallen to just one percent, however, the Australian Retailers Association (ARA) says the latest quarterly Consumer Price Index (CPI) figures bring even worse news retailers for food, drinks and apparel.
Australia’s inflation rate rose 1.0 per cent in the year to the June quarter, it’s weakest annual rise since 1999. The consumer price index rose 0.4 per cent in the quarter, missing market expectations of a 0.5 per cent rise, figures from the Australian Bureau of Statistics on Wednesday showed
CPI for food and non-alcoholic beverage dropped to -0.1 percent for the quarter to June 2016, year on year, while clothing and footwear has fallen even further to -0.2.
Russell Zimmerman, ARA executive director, said that while there had been an uptick in quarter on quarter CPI for clothing and footwear of two percent, food and non-alcoholic beverages continued its pattern of deflation, falling 0.4 percent on the first quarter of 2016.
“With inflation running well below trend there has been evidence for some time that deflation has been occurring, particularly in the grocery sector,” said Zimmerman.
“With grocery making up close to 50 percent of total retail and indications of stronger competition from international players within other retail segments, we are seeing volumes increase while prices fall.
“While this is a win, for the consumer, governments at all levels must be conscious of cost pressure on the retail sector and the need to support a more productive retail environment to support the sector’s good health,” he said.
Alcohol and tobacco products showed one of the strongest year on year results of all categories, growing 5.9 percent year on year, while furnishings, household equipment and services rose by 1.6 percent annually.
“Excise increases are clearly driving alcohol and tobacco prices, despite downward pressure on the real cost of the products,” Zimmerman concluded.
Access exclusive analysis, locked news and reports with Inside Retail Weekly. Subscribe today and get our premium print publication delivered to your door every week.
