Retail trade figures "disappointing"

Published on Tue, 10/01/2012, 04:00:18

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While the two interest rates cuts were welcomed with open arms by retailers at the end of last year it didn’t change the attitudes of consumers as the latest ABS retail trade figures show that retail turnover in November 2011 was flat.

Remaining relatively unchanged (0.0 per cent), seasonally adjusted, following a rise of 0.2 per cent the previous month, the trade figures has been described as “disappointing” by  corporate retail bodies the Australian Retailers Association (ARA) and the Australian National Retailers Association (ANRA).

Clothing, footwear and personal accessory retailing had the most detrimental impact where turnover fell -0.4 per cent followed by department stores dropping to -0.1 per cent.

ANRA CEO Margy Osmond said after four successive months of retail trade growth the results for November have put a slump in the possibility of trade improvement.

“The cold start to the summer is reflected in a 0.4% drop in clothing, footwear and personal accessory retailing nationally and in the great bargains in that category in the sales season. Department stores also went down -0.1% in the run up to the critical Christmas trading season. Even food retailing, consistently the strongest part of the sector, had a poor showing in November, with the 0.02% rise the weakest result since May 2011,” she said.

“Retailers reported a slow start to Christmas shopping and these figures are in line with that anecdotal evidence.

“All the indicators suggested November would see another positive figure for the sector – consumer confidence was up, there was a rate cut and strong employment rates. But poor summer weather and the continued troubles in Europe on the TV every night have prompted shoppers to keep their purse string firmly tied in fear of future problems closer to home.”

In spite of this, the 3.1 percent overall year-on-year growth continues to give retailers a reason to be hopeful for a successful Christmas trading period.
ARA executive director Russell Zimmerman said the 3.1 percent boost compared to November 2010 showed the interest rate cut was what consumers needed to kick start their shopping for the season.

“Looking ahead to December we know most people leave their Christmas shopping until the last minute so coupled with December’s interest rate cut this will hopefully mean December trade fared better on the fashion front,” he said.


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These figures are indeed disappointing, and I feel for Australian retail businesses. However, I think our retailers need to focus on reconnecting with the consumers to understand what they need and value from the retail experience - as this has obviously changed and will continue to do so. Blaming weak sales figures on "poor summer weather" and the "troubles in Europe" - are possibly misleading and will not spur the customer-centric approach and innovation required to get the Australian retail industry out of this slump. Recent research, which surveyed over 1000 Australian consumers, points to this as well as delivers other interesting insights including the fact that deep discounting is not the solution for Australian retailers. You can download the report for free here: http://www.brainmates.com.au/general/retail-revival-a-fresh-perspective
Posted by brianna. 10/01/2012 04:46:36 PM
It is interesting to read all of the feed aback from consumers on "the need" for Australian retailers to listen to their customers. We all need to look at the current time in a holistic way and look at how we can be so secular in relation to the economy. We now work in global parameters, it’s that simple. The consumer now shops globally, yet does not think of the ramifications of what this does in their own location. You cannot have it both ways. Cheap prices means cheap wages, something that we do not want to face in this country. There is no unity at any level so we see a retail system that is struggling and consumers who are now trained by retailers to purchase the majority of goods when there is a sale tag in place. It is true that we see some poor retail experiences in Australia compared to other parts of the globe - Why? The statement "its so far away from the rest of the world" does not fit any more, so why are we in this situation, what situation is it? Sales that are not growing so we think this is a bad thing??? Growth is not a percentage of dollars, it’s a business that is productive, pays its team, investors and suppliers. It is intrinsic in the consumers mind for service, integrity and relevance. This is what a sucessful retail economy is about.
Posted by Allan Donnelly. 11/01/2012 10:24:25 AM
As a retailer the reality of this horrible situation is that the blame must be given to the Media in all its forms and to the spin doctors feeding them. Media has caused fear to the extend that consumers are not spending but rather are holding onto their money for some future disaster that may never happen. If consumers do not start to spend then it will get worse...this is a no brainer. Australia is in an excellent position but this fear grasping consumers WILL cause the exact situation what people fear the most... unemployment or closure of business. The power to change this down spiral is not with the politicians or the banks or media it is with the INDIVIDUAL!
Posted by A.Musumeci. 11/01/2012 11:08:28 AM
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