Despite a strong start earlier in the year, the retail industry has tumbled with the latest Australian Bureau of Statistics (ABS) Retail Trade figures showing a 0.4 per cent drop in retail turnover in March.
This follows a solid 1.3 per cent rise in February 2013. The largest contributor to the fall was the -4.2 per cent decline in clothing, footwear and personal retailing. Trailing behind was household goods retailing (-1.5 per cent), other retailing (-1.0 per cent) and department stores (-0.1 per cent).
These falls were partially offset by rises in food retailing (0.8 per cent), which continues to build promising momentum as it has been the largest contributor to growth, and cafes, restaurants and takeaway food services (0.2 per cent).
Australian Retailers Association executive director Russell Zimmerman said the fall was a further sign that the retail sector is still facing significant challenges and the Reserve Bank of Australia (RBA) must reduce interest rates to at least 2.5 per cent.
“The ARA still firmly believes the right cash rate sits at around 2.5 per cent or below. Of course, the banks also need to bring interest rates down to levels which match other economically comparable countries in light of their good profit results and alleviate pressure on their consumer and business borrowers,” he said.
“Overall, the 0.4 per cent decrease in March shows the lack of consumer confidence in the whole economic situation in Australia.”
The state which was the largest contributor to the fall was Queensland (-0.8 per cent) followed by Victoria (-0.6 per cent), New South Wales (-0.2 per cent) and the Australian Capital Territory (-0.8 per cent).
“Recent political instability is a risk to supping consumer confidence further,” Zimmerman said.
“Political stability can only be achieved through a majority government and the September election can’t come soon enough.
Through the year, Australian retail turnover rose 3.2 per cent in March 2013, seasonally adjusted, compared to March 2012.
The trend estimate for Australian retail turnover rose 0.4 per cent in March 2013. This follows a rise of 0.4 per cent in February 2013. Through the year, the trend estimate rose 3.3 per cent in March 2013 compared to March 2012. In volume terms, turnover rose 2.2 per cent in the March quarter 2013, seasonally adjusted, following a rise of 0.1 per cent in the December quarter 2012.