Retail sales miss expectations in September
Australian retail spending slowed during the month of September, landing below the level forecasted by economists and experienced during the previous month.
Retail turnover rose 0.2 per cent in September according to the Australian Bureau of Statistics, compared to the 0.4 per cent growth seen in August, and the 0.4 per cent expected by economists.
“There was a mix of results at the industry level this month,” ABS director of quarterly economy wide surveys Ben James said.
“Rises were seen in other retailing (0.8 per cent), cafes, restaurants and takeaway services (0.6 per cent), and food retailing (0.1 per cent).
“These rises were slightly offset by a fall in clothing, footwear and personal accessory retailing (-0.5 per cent) and department stores (-0.2 per cent). Household goods was relatively unchanged.”
These category decreases are despite the $22.4 billion in tax refunds passed on to Australians after the coalition government’s tax cuts, according to AAP.
Indeed.com APAC economist Callam Pickering noted that the Australian retail sector hadn’t struggled to sell product this badly since the last recession – echoing comments made by NAB chief economist Alan Oster in June.
The National Retail Association chief executive Dominique Lamb said that while the figures aren’t disastrous, the NRA had expected them to be higher.
“Measures such as tax cuts and reductions to interest rates have already been implemented, but clearly we’re still yet to see retail sales rebound like we would have hoped,” Lamb said.
“Christmas is an important time of the year for retail and many smaller operators rely on strong sales in the festive season to sustain their business throughout quieter parts of the year.”
According to Lamb, a poor Christmas period in retail is likely to have a knock-on effect into other parts of the economy.
Online sales improve despite bricks-and-mortar slowdown
Despite the sluggish growth in overall retail sales, online retail saw a more impressive September, growing 1.8 per cent over the month and 10.5 per cent year on year.
According to the NAB Online Retail Sales Index, all online retail categories barring fashion saw growth in month on month terms.
While fashion saw a 1 per cent drop over the month, online sales of games and toys grew 9 per cent, while takeaway food grew 7 per cent.
Online grocery and liquor sales grew by approximately 1.7 per cent month on month.
Metro areas continue to see strong online spending, up 2.2 per cent month on month, while regional areas fell 0.5 per cent.
“Online retail sales tend to be more volatile than broader retail, experiencing far greater monthly fluctuations, but the last six months have been considerably more so,” Oster said.
“Looking through the month-to-month volatility, sales growth in year-on-year terms returned to double digits, and 12 months to September growth remains strong [at 9.1 per cent of total spend].”
NAB estimates Australians spent $29.53 billion on online retail in the year to September.
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