The Australian Retailers Association (ARA) said December trade figures released today by the Australian Bureau of Statistics (ABS) represents a reputable Christmas trade with a 2.75% total year-on-year growth in 2018, compared to 2.49% in 2017.
While media commentary will inevitably focus on the -0.38% drop in month-on-month figures, Russell Zimmerman, Executive Director of the ARA, said retailers focus on the more representative year-on-year numbers, which more accurately reflect the seasonality of retail trading.
Mr Zimmerman said although the ARA and Roy Morgan predicted a 2.9% increase in pre-Christmas sales from November 9 to December 24, 2018, the year-on-year figures released today are close to the estimated sales forecasted in November for December.
"Although the month-on-month figures from the ABS display a conservative December trade, retailers tend to focus on year-on-year growth for a more concise depiction of how their stores are faring," Mr Zimmerman said.
"Each year the ARA and Roy Morgan work together to produce the only professionally industry researched Christmas predictions in Australia, and we believe the figures released today are broadly in line with the figures forecasted in November."
December saw the industry record impressive year-on-year growth across the Food retailing category at (3.98%), while Cafes, Restaurants and Takeaway (2.92%), Clothing (3.21%), Pharmacy/Cosmetics (5.03%) and Other retailing (7.84%) also showed a substantial increase.
"Food retailing performed exceptionally well this season, with specialised food in particular posting a 3.1% year-on-year growth, while Other retailing proved to be the real standout for this month," Mr Zimmerman said.
"Pharmacy and Cosmetics was a real highlight in the December figures as expected, fragrances, bath and body products and cosmetics gifts proving popular again in the lead-up to Christmas."
While department stores recorded a 0.53% year-on-year jump, weakness in the Electrical (-2.9%), Newspapers and Books (-6.31%) and Recreational Goods (-4.81%) categories were sobering.
"Although these figures are disappointing, it is important to note that there are a variety of factors that have contributed to these soft figures, including the decrease in consumer sentiment caused by rising household costs and low wage growth, which continues to plague the industry and overall economy."
Across country, Tasmania (4.66%), the Australian Capital Territory (4.61%) and Victoria (4.50%) led the charge with the strongest year-on-year growth, while Queensland (3.47%), New South Wales (1.73%) and Western Australia (1.23%) recorded respectable growth. Unfortunately, South Australia (0.87%) was flat and the Northern Territory (-1.50%) received negative figures in December.
"Tasmania, Victoria and Queensland have remained fierce contenders across the States and Territories, showing consistent and reliable year-on-year growth for the 2018 calendar year," Mr Zimmerman said.
"It is pleasing to see that Western Australia has shown its strongest year-on-year growth this month since July 2017, which is a promising preview for trade into 2019, while the upcoming New South Wales election may have also contributed to their results."
On a bright note, the retail industry recorded an average year-on-year growth of 3% for the 2018 calendar year, compared to 2.76% for the previous year, on the back of a significant improvement for the apparel category.
"Despite the ominous commentary announced by multiple media outlets regarding a subdued Christmas trade, today's figures prove that there has been reasonable growth across some categories," Mr Zimmerman said.
"The consumer-led nature of the Australian retail sector signals the importance of strong, accurate leadership and the ARA is the only retail association constantly working to move retail forward."
Monthly Retail Growth (November 2018 – December 2018 seasonally adjusted)
Cafés, restaurants and takeaway food services (1.07%), Food retailing (0.53%), Other retailing (-0.10%), Department stores (-1.09%), Clothing, footwear and personal accessory retailing (-2.36%) and Household goods retailing (-2.82%).
Western Australia (0.12%), Queensland (-0.15%), Tasmania (-0.16%), South Australia (-0.25%), Northern Territory (-0.35%), Victoria (-0.52%), New South Wales (-0.55%) and Australian Capital Territory (-1.80%).
Total sales (-0.38%).
Year-on-Year Retail Growth (December 2017 – December 2018 seasonally adjusted)
Other retailing (4.25%), Food retailing (3.98%), Cafés, restaurants and takeaway food services (2.92%), Clothing, footwear and personal accessory retailing (2.38%), Department stores (0.53%), and Household goods retailing (-0.54%).
Tasmania (4.66%), Australian Capital Territory (4.61%), Victoria (4.50%), Queensland (3.47%), New South Wales (1.73%), Western Australia (1.23%), South Australia (0.87%), and Northern Territory (-1.50%).
Total sales (2.75%).
