Signs that consumers are spending is becoming more evident as retail turnover for August rises 0.2 per cent, despite a tough drop of 0.8 per cent in July, according to the latest Australian Bureau Statistics (ABS) Retail Trade figures.
National Retail Association executive director Trevor Evans said the ABS report of a 0.2 per cent increase in retail trade turnover in August was very welcome, but he also noted it followed a more significant decline in July.
“While today’s numbers are positive, they are not strong enough to return the sector to the level of retail turnover experienced in June,” he said.
“Rather than being evidence of an emerging trend, this is more evidence of volatility in the sector, and that Australian retail is in a state of significant flux.
“We welcome these results, of course – any growth is a very welcome outcome for struggling traders.”
The results show consumers are increasing their spending in departments stores where it rose 6.9 per cent, followed equally by food retailing (0.4 per cent) and other retailing (0.4 per cent). These rises were partially offset by falls in household goods retailing (-1.5 per cent), cafes, restaurants and takeaway food services (-0.9 per cent) and clothing, footwear and personal accessory retailing (-0.7 per cent).
The large rise in department stores follows a larger fall in July. However, department stores remain the weakest performing industry over the longer term down 0.4 per cent in trend terms. The strongest performing industry over the longer term was cafes, restaurants and takeaway food services up 0.5 per cent in trend terms.
Australian National Retailers Association (ANRA) CEO, Margy Osmond said the rollercoaster ride for department stores continues.
“Department stores have borne the brunt of a consumer unwilling to spend, wanting to pay down debt and demanding a bargain – a difficult combination for any discretionary retailer to work with.
“Despite this there is some brightness on the horizon, the 6.9 per cent jump is the biggest leap for Department stores since March 2009 and they are up 2.1 per cent so far in 2012. At the same stage last year department store retailers were facing a dismal -2.9 per cent.
“Aussies have embraced the Winter Sales season, cooled their heels as winter came to a close and were back in store to check out the new season’s stock as the weather turned thoughts from coats to frocks. Retailers will be hoping this Spring/Summer return to shopping continues through to Christmas.
“It is now up to the banks to move quickly to assure Aussie shoppers that their mortgage payments will be tracking down and they can afford their utility bills as well as a couple of extra treats in the months to come,” she said.
However, the state-by-state results continued to show significant regional disparity across the nation. The largest contributor to the rise was Western Australia (1.4 per cent) followed by Queensland (0.2 per cent), New South Wales (0.1 per cent), the Australian Capital Territory (1.2 per cent) and South Australia (0.2 per cent). Falls were recorded in Victoria (-0.1 per cent), Tasmania (-0.7 per cent) and the Northern Territory (-0.1 per cent) in August 2012.
“Western Australia continues to be the stand-out performer, as it has been for the last couple of years," Evans said.
“And while the increase in Queensland is only modest, it is another positive result for the state from recent months. Take the clock back 12 months and Queensland was lagging the nation.
“So this is a good result, and one which we hope indicates the green shoots of recovery.”