Confidence builds ahead of Christmas
Shoppers spent $23.5 billion in October, a modest 0.4 per cent rise compared to September, which recorded growth of 1.2 per cent, according to the Australian Bureau of Statistics (ABS).
It is the fifth consecutive month retail spend has been up, lifted by household goods and department store categories.
Department stores recorded the highest growth for the month at 2 per cent; followed by household goods retailing, 1.4 per cent; clothing, footwear, and accessories, 1.1 per cent; food retailing, 0.5 per cent; other retailing, 0.2 per cent.Cafes, restaurants, and takeaway food services, saw a drop of 2.1 per cent.
By state, South Australia reported an increased of 1.2 per cent for October; followed by NSW, 0.7 per cent; Australian Capital Territory 0.4 per cent; Queensland, 0.4 per cent; WA, 0.1 per cent. Victoria had no growth, while Tasmania and Northern Territory reported falls of 1.0 per cent and 0.4 per cent respectively.
Russell Zimmerman, executive director of the Australian Retailers Association (ARA), said despite the modest 0.4 per cent rise, the ARA is remains confident sales will reach the retail group’s estimated $45 billion for the Christmas season.
“October’s modest results are somewhat expected and it will be interesting to see whether November’s results show a much sharper spike in sales when pre-Christmas shopping gets into full swing,” Zimmerman said.
Anna McPhee, Australian National Retailers’ Association CEO, said retail spending figures for October show that actions speak louder than words when it comes to confidence. A key indicator is discretionary spending, which is up 1.1 per cent, in October.
“With mostly positive month on month growth, the pattern of broad spending across the categories and state and territories indicates retail turnover is likely to finish the year in a good position compared to previous years,” McPhee said.
“Today’s figures will help to drive the sector towards the long-term average annual growth rate of six per cent for the first time in five years. This consistent and incremental growth will mean the sector will contribute a little more than four per cent of GDP this year,” she said.
National Retail Association CEO, Trevor Evans, said the growth showed that retail trade was returning to levels once considered normal, after many years of sluggish performance.
“These results are very welcome news for retailers. They confirm a continuation of the upward trend that began late last year,” Evans said.
“While the overall results are welcome and point to an ongoing recovery for retail, the patchy state and category results show that there is still a long way to go before the sector returns to its pre-GFC strength. However, this is the continuation of a welcome trend, and a sign that retailers and their staff are headed for a merry Christmas,” Evans said.