Retail spending rises in December

Christmas ShoppingNational retail spending saw three per cent growth year-on-year in December (seasonally adjusted), showing a positive Christmas performance, according to the latest Australian Bureau of Statistics (ABS) trade figures released yesterday.

Monthly retail turnover however showed a drop in the December retail figures of 0.1 per cent, seasonally adjusted, following a 0.1 per cent increase in November.

Seasonally adjusted retail spending was $25.6 billion in December, according to the ABS retail trade figures.

There were falls in household goods retailing (-2.3 per cent), and other retailing (-0.2 per cent). These falls were offset by rises in food retailing (0.5 per cent), clothing, footwear and personal accessory retailing (1.4 per cent), cafes, restaurants and takeaway food services (0.2 per cent), and department stores (0.3 per cent).

The fall in household goods retailing is the result of a fall in the Hardware, building and garden supplies retailing industry subgroup, which fell 6.6 per cent in December after rises in each of the previous four months, attributed by analysts towards the closure of Masters stores across the country.

The Australian Retailers Association (ARA) believes the December 2016 retail trade figures illustrate a positive Christmas performance for retailers.

Russell Zimmerman, ARA executive director, said this steady growth compliments the three per cent year-on year growth in November 2016 as many families across Australia started purchasing their Christmas gifts early.

“This moderate growth in December sales is a positive sign for the industry and we remain hopeful that the ARA and Roy Morgan predicted pre-Christmas sales figure of $48.1 billion will be achieved once we finalise the numbers,” Zimmerman said.

Although December 2016 sales showed no increase over November 2016 trade figures, Zimmerman said the industry’s annual Christmas performance remains stable and the uplift in discretionary spend is exactly what the industry would expect.

Data shows there were increases in a number of categories. Clothing, footwear and personal accessory retailing lead the categories growing at 7.3 per cent year-on-year, followed closely by pharmaceutical, cosmetic and toiletry goods (5.33 per cent year-on-year).

“Even Newspaper and Book Retailing has shown a positive uplift from -6 per cent during November 2016 trading, to an optimistic 0.91 per cent growth due to many shoppers filling their Christmas stockings with popular book titles last year”, Zimmerman said.

According to ARA, the official closure of Masters during December took its toll on the Hardware category (1.76 per cent year-on-year) down from 10.15 per cent in November 2016 figures.

“We have seen an expected decrease in hardware figures temporarily, but now with reduced discounting and strong home price growth we can expect positive figures moving forward,” Zimmerman said.

The states showing a healthy year-on-year growth include Tasmania (4.40 per cent), South Australia (3.92 per cent), New South Wales (3.37 per cent) and Queensland (3.42 per cent). While Victoria (2.96 per cent), Australian Capital Territory (2.83 per cent), Northern Territory (1.49 per cent) and Western Australia (0.85 per cent) aren’t leading the pack, they still demonstrated a positive growth over the December trading period.

In terms of online spend for December, the NAB Online Retail Sales Index indicates that e-commerce sales increased 10.4 per cent year-on-year, with takeaway food and taking the lion’s share of growth on a category basis at 5.5 per cent year-on-year.

“With online retail making up seven per cent of all retail sales, it’s double digit growth year-on-year is not surprising as e-commerce retailing is a key

NRA CEO Dominique Lamb said the figures are in line with its pre-Christmas forecast of $46.5 billion for the Christmas retail trade period.

“The NRA was always confident that retail would enjoy a merry Christmas and we are delighted that we were spot on with our projection and that retail enjoyed a record spend for Christmas 2016,” she said.

“The figures represent a rise of 4.3 per cent on the Christmas 2015 trade figures, which is in line with the average increase for the Christmas trade period each year.

“This is the first time that retail has cracked an average spend of more than one billion dollars a day for the Christmas trade period and it is good news for the entire industry.

“These results should also give retailers and employees confidence as we head into 2017.”

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