Cold start for Christmas trade

shopping3October trade figures released yesterday by the Australian Bureau of Statistics (ABS) represent a cold start for Christmas trade, according to the Australian Retailers Association (ARA).

With 1.82 per cent year-on-year growth, ARA executive director Russell Zimmerman said the figures are extremely disheartening this close to the biggest trading period of the year.

“With Christmas just around the corner, these trade figures illustrate just how hard it is for small businesses to compete with rising costs, coupled with the increase in global competition and the 24-hour marketplace,” Zimmerman said.

Dominique Lamb, CEO of the National Retail Association, however, had a more positive take, stating with the 0.5 per cent increase in retail turnover, retail is finally awakening from its slumber following sluggish results in the previous months.

“Australian retail had experienced three consecutive months of zero or negative growth before the release of the October figures so an increase in retail turnover of 0.5 per cent is certainly welcome news,” Lamb said.

All major categories of the retail sector recorded growth in October with total retail turnover hitting $26.05 billion, up 0.5 per cent from September’s $25.9 billion, seasonally adjusted.

The strongest spending growth in October came for footwear and other personal accessories, with an increase of 2.5 per cent.

Spending at cafes and restaurants rose by two per cent, and takeaway food sales increased by 1.2 per cent.

Turnover at department stores rose by 0.5 per cent, the third straight month of growth for the sector.

The weakest growth was felt in household goods retailing and in food retailing, each with a rise of 0.1 per cent.

Year-on-year, however, Zimmerman said there has been a drop in some categories.

“As household prices begin to ease off, these October figures have been mostly affected by the significant drop in Household Goods, with this retail category receiving a -1.95 per cent in year-on-year growth.”

Other retail categories showing a considerable drop in year-on-year growth include Hardware & Building (-4.92 per cent), Newspapers & Books (-4.08 per cent) and Other Recreational Goods (-2.43 per cent).

Zimmerman said they believe Amazon’s entrance into Australia presents a fantastic opportunity for retailers to increase their sales through their online platform.

“With over 300 million users already on the Amazon Marketplace, retailers will be able to optimise their sales and reach consumers all around the world,” Zimmerman said.

“Clothing Footwear & Personal Accessories (1.61 per cent) had a moderate year-on-year increase due to spring racing, however this growth is still lagging compared to the start of the year.”

Department Stores (2.78 per cent) have begun to recover their year-on-year growth since July, after re-focussing their product and service offerings to compete with the impending launch of Amazon, and other global giants entering the Australian retail market.

“Cafes Restaurants & Takeaway Food (3.09 per cent) and Food Retailing (2.95 per cent) have seen the biggest growth year-on-year of the retail categories due to the change in season and warmer weather,” Zimmerman said

South Australia (4.09 per cent), Victoria (3.36 per cent), Tasmania (2.68 per cent) and New South Wales (2.43 per cent) showed the strongest year-on-year growth of all the states. While both the Australian Capital Territory (1.31 per cent) and the Northern Territory (0.11 per cent) remained quite low. Unfortunately, we saw Queensland (-0.17 per cent) and Western Australia (-0.98 per cent) receive negative figures, a scary sign for Christmas.

According to Lamb, with the retail sector now in the middle of the busy Christmas period, the NRA is optimistic that the recent figures show retail getting back up on its feet.

“Off the back of these figures the NRA is confident that the retail sector is on track to record the $48 billion in sales that we forecasted for the Christmas trade period,” she said.

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