According to new Australian Bureau of Statistics (ABS) figures retail turnover rose 0.5 per cent in May after a jump of just 0.1 per cent in April.
Cafes, restaurants and takeaway services recorded the biggest increase of 1.4 per cent while household goods retailing also posted a strong result with a 0.8 per cent rise. The department stores, clothing, footwear and personal accessories categories similarly had a good month with a rise of 0.5 per cent.
Food retailing was the only industry to fall in May with a slight drop of 0.1 per cent but remains a main contributor to growth in trend terms.
New South Wales posted its third consecutive monthly rise while Western Australia continued its strong performance rising 1.1 per cent and in trend terms is the best performing state over the long term.
Victoria, Queensland and the Northern Territory also recorded increases but turnover in South Australia, Tasmania and the Australian Capital Territory fell.
In a sign the retail sector may be doing better than believed the ABS trend estimate figures show retail turnover has recorded its strongest rise in dollar terms since June 2010 with a 0.4 per cent in March, April and May this year.
Australian Retailers Association (ARA) executive director Russell Zimmerman says the spending spike can be attributed to winter temperatures.
“Cool May weather in the southern states is a reason for the spike in trade figures we have seen,” he explains. “Categories which rely on consumer discretionary spend such as department stores, clothing and footwear and household goods have enjoyed a modest boost for the first time in quite a few months – both month on month and year on year.”
However, he is concerned the introduction of the carbon tax will hamper any further chance for growth.
“The current reality for retailers is every time there is a modest boost such as this, increased economic pressure creates a barrier to any continuation of the trend, which is why the ARA is still predicting slow to zero growth in trade for the rest of the year,” he adds.
“Families have recently been hit hard with more financial pressure as a result of the carbon tax, which the ARA does not believe has been adequately compensated for.
“For retailers, the cost of operating a business is moving upwards as cost increases throughout the supply chain as a result of the carbon tax are captured by this vulnerable economic sector, which cops pressure from both the supplier side and the consumer angle.”