The 0.3 per cent growth in retail turnover for April was in line with predictions and continued to showed signs of slow and patchy recovery across states and retail sectors.
April retail trade (NSW 1.3 per cent, VIC 0.0 per cent, QLD 0.8 per cent, SA -0.1 per cent, WA -2.4 per cent, TAS 0.5 per cent, NT -4.6 per cent, ACT 0.9 per cent) showed improved but sporadic growth as consumers across the country adjusted their discretionary spend by loosening the purse strings in some areas but tightening them in others.
“This sort of patchy recovery across retail sectors (food retailing -0.2 per cent, department stores -2.8 per cent, clothing and soft good retailing 0.8 per cent, household good retailing 3.9 per cent, other retailing 0.1 per cent, cafes, restaurants and takeaways -0.5 per cent) reflects the inconsistency between low consumer confidence and increased available spend,” said Australian Retailers Association (ARA) executive director Richard Evans.
“With low interest rates and lower petrol prices, consumers are cashed up but their confidence is still being dampened by negative economic rhetoric which is reflected in inconsistent spending across retail sectors.
“April’s growth in household goods retailing (3.9 percent) indicated cashed-up consumers were slowly coming out of financial hibernation without guilt and spending money on purchases they’ve been delaying over the past year,” said Evans.
The National Retail Association (NRA)’s executive director Gary Black was slightly more optimistic, saying that the minimal increase in retail sales for April 2009 over March 2009 was to be expected given the strong growth recorded in March and the fact that in most states there were four less trading days in April (a 30-day month and closed days on Good Friday, Easter Sunday and Anzac Day).
“The retail trade data suggests that consumer confidence remains reasonably positive and that the economic downturn has not yet significantly negatively impacted the retail sector in aggregate terms.
This is good news for the Australian economy and good news for employment. The performance of the retail sector remains a reliable barometer of the health of the economy generally and the retail sector remains the biggest employing sector of the Australian economy,” said Black.
The household goods sector, including bigger ticket items like furniture and whitegoods, could also see improved growth in May figures with first home owners rushing to take advantage of the government grant and furnishing new homes.
"Growth in clothing and soft goods retailing (0.8 per cent) reflects the change of season but we expect to see some more recovery in this sector as well as department stores (-2.8 per cent) when June stocktake sales take off in the next couple of weeks,” said Evans.
"Retailers remain optimistic about improved growth in the September quarter with the mitigating factor for economic recovery being employment. However, recovery will be patchy across sectors with retailers looking forward to more growth, but with some slow trade in the months ahead,” said Evans.
Most retailers report that sales performance in April has been positively impacted by the Australian Government’s cash handouts, which have been progressively distributed across March, April and May. These handouts continue to play an important role in stimulating discretionary consumer spending, according to Black.