THE Australian Retailers Association (ARA), is hoping this week’s interest rate cut will halt the year on year slide of retail sales growth, with Australian Bureau of Stastics data showing growth for the year to June 2016 of 2.7 percent.
Retail sales growth has been on a decline for the last six months, falling from a high of five percent in June 2015.
Month on month growth (May 2016 compared to June 2016) came in at a meagre 0.1 percent. Total retail sales for June 2016 were $25 billion.
Russell Zimmerman, ARA Executive Director, said the June figure is the combination of several factors, most predominately the lead up to the Federal Election on July 2.
“Elections are notorious for causing lower consumer confidence and depressed sales, which appears to have been the case here,” Mr Zimmerman said.
“Unseasonably warm temperatures across the nation, deflation, and world events, such as the UK’s Brexit decision and fallout, and the growing prominence of the upcoming US election, all took a toll on consumer confidence in June, and while some of these issues will cycle out in the next few months, there some retailers who are doing it tough at the moment,” he said.
Retailers in the Northern Territory and Western Australia particularly felt the pinch, with the lowest sales in at least five years, with NT experiencing a decline 0f 1.3 percent in sales, while WA managed an increase of just 0.5 percent.
Tasmania has continued its sales comeback, with the largest growth of all the states and territories, at 4.6 percent, followed by Victoria and the ACT with 3.9 percent and 3.8 percent growth respectively.
Following on from the trends of the last few months, household good suffered almost static growth of 0.8 percent, while food, which is under significant pressure from competition and deflation, posted 1.8 percent growth.
Department stores, however, will be rejoicing at their healthy 4.9 percent growth following a period of stagnation in the last two years, while clothing and footwear was the big winner, increasing sales by 8.9 percent.
“There are some positive changes to have occurred since June, and the ARA anticipates that this will result in a return to the higher growth of 2015, Mr Zimmerman said.
“The lowering of interest rates this week is predicted to boost confidence and provide consumers with more discretionary cash, and with the Election now behind us and producing a clear result, we’re hopeful retail will bounce back to a healthier level of growth in the coming months,” he said.
YEAR ON YEAR RETAIL GROWTH (June 2015 to June 2016 seasonally adjusted)
By category:
Food, 1.8 percent; household goods, 0.8 percent; clothing, footwear and personal accessories, 8.7 percent; department stores,4.9 percent; other retailing, 3.8 percent; cafés, restaurants and takeaway foods, 2.3 percent.
By state:
NSW, 3.2 percent; Victoria, 3.9 percent; Queensland, 1.5 percent; South Australia, 3.1 percent; Western Australia, 0.5 percent; Tasmania, 4.6 percent; Northern Territory, -1.3 percent; and Australian Capital Territory, 3.8 percent.
About the Australian Retailers Association:
Founded in 1903, the Australian Retailers Association (ARA) is the retail industry’s peak representative body representing Australia’s $293 billion sector, which employs more than 1.2 million people. The ARA works to ensure retail success by informing, protecting, advocating, educating and saving money for its 5,000 independent and national retail members throughout Australia. For more information, visit www.retail.org.au or call 1300 368 041.
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