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Department stores lead retail rise in May

 

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Retail sales rose 0.4 per cent in May, seasonally adjusted, with department stores leading the way after a campaign of discounting.

The stronger-than-expected growth follows a revised increase of 0.5 per cent in April, according to the Australian Bureau of Statistics (ABS).

Ben James, director of quarterly economy wide surveys at the ABS, said the figures show department stores and clothing, footwear and personal accessories had been able to rebound after an unusually warm April impacted sales.

“Department stores (3.9 per cent) led the rises,” James said. “There was also a strong result in clothing, footwear and personal accessories, which rose 2.2 per cent.”

Food and household goods rose 0.3 per cent and 0.1 per cent respectively, while cafes, restaurants and takeaways led the falls (-1.0 per cent). Other retailing also fell (-0.1 per cent).

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On a state by state basis, there were rises in New South Wales (0.5 per cent), Queensland (0.4 per cent), South Australia (1.1 per cent), Victoria (0.2 per cent), Tasmania (1.5 per cent), and the Northern Territory (0.4 per cent).

Western Australia fell (-0.5 per cent) while the Australian Capital Territory (0.0 per cent) was relatively unchanged.

Although May sales were above market expectations, the Australian Retailers Association (ARA) executive director Russell Zimmerman said the figures represent a weaker lead in to winter than retailers would have liked.

He said while the May figures seem “quite dismal”, the industry needs to take into account they are based on a period before the second stage of the penalty rate reduction was implemented and the low value import threshold GST was introduced.

“While the ARA [is] concerned with this meek growth, the retail industry received two big wins on 1 July and we look forward to the benefits this will bring our retailers, their staff and the overall economy,” Zimmerman said.

National Retail Association CEO Dominique Lamb said cooler weather had helped department stores and clothing retailers rebound after poor showings in April.

“Retail has now recorded two consecutive months of solid rises in turnover and we’re optimistic that it means the sector has turned the corner following a modest start to 2018,” she said.

“The April figures were a relief after sales stalled in the opening months of 2018, but the May results are hopefully a sign that retail is about to kick on and have a successful second half to 2018.”

Lamb said she expects to see department stores and clothing sales continue to rise in the coming months as shoppers cash in on winter shopping bargains.

 

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