The Executive Director of the Australian Retailers' Association, Russell Zimmerman, said June retail trade figures from the Australian Bureau of Statistics showing annual growth of 2.55%, with Queensland (5.68%) and Victoria (3.47%) continuing to outpace the country, were best viewed as "mostly positive, with areas of concern."
Addressing month-on-month figures showing growth in June of 0.4%, after a 0.1% rise in May, Mr Zimmerman said these underlined the ARA's belief the federal election dampened spending, which was starting to rebound.
"My first point is the "election effect" has now washed out of the retail trade figures, and the numbers for June - with strengthening in both year-on-year and month-on-month indices - underline that," Mr Zimmerman said.
"That said, whilst the overall picture is positive, these numbers do highlight some areas of concern," he added.
Mr Zimmerman noted that ARA commentary around patchy but nevertheless positive overall retail trade in recent months appeared to be correct, but stressed that this overall sentiment did not whitewash the fact - borne out by today's figures - that some parts of the retail sector remained heavily subdued.
"We've had comment today, for example, from David Jones that they're finding it tough; the exit of Debenham's from Australia in a tough environment for department stores is further underlined by two consecutive months of contraction in that sector, for a year-on-year expansion of just 0.93% ," Mr Zimmerman said.
"In contrast, continued growth in the café, restaurant and takeaway sector shows strengthening expenditure in a very discretionary category, so we certainly know consumers have money to spend," Mr Zimmerman said.
Mr Zimmerman said that annual growth in food retailing was being supported by strong growth in supermarket trade (3.81%), whilst a fall in specialised food (-1.55%) possibly reflected the impact of the drought.
"So again, the overall picture is pleasing, but when you unpack it, there are these areas for concern," he said.
Mr Zimmerman noted that continued year-on-year falls in furniture retail figures (-3.31%) were probably compounded by the effects of an entrenched culture of permanent discounts in a densely competitive sector.
"On the other hand, we've seen increases in the clothing (1.89%) and footwear and personal accessories (6.36%) categories, but these may be at the expense of margin due to 'end of year' sales," Mr Zimmerman said.
Mr Zimmerman said he suspected end of financial year sales at reduced margins had similarly compounded the disappointing numbers in the department store sector in today's June figures.
Mr Zimmerman again noted the longstanding decline in newspapers, books, and other recreational goods, but said substantial growth in sales for pharmacies, cosmetics, toiletries and online reinforced the ARA's view that these categories - viewed overall - were emblematic of consumers' shift to online purchases in certain areas.
Mr Zimmerman noted Queensland and Victoria - accounting for 44% of the national population - continued to drive retail sales nationally, and that spending in NSW appeared to be recovering in today's figures.
"Even so, we remain deeply worried about Northern Territory retailers, who continue to experience declining volumes, and we're concerned South Australia has declined for two consecutive months, so as I said these figures are mostly positive, but there are certainly areas of concern that we'll watch," Mr Zimmerman concluded.
Monthly Retail Growth (May 2019 - June 2019, seasonally adjusted)
Clothing, footwear and personal accessory retailing (1.95%), Other retailing (0.63%), Cafés, restaurants and takeaway food services (0.47%), Household goods retailing (0.19%), Food retailing (0.14%), and Department stores (-0.59%).
Tasmania (1.45%), Western Australia (0.84%), Queensland (0.40%), New South Wales (0.35%), Australian Capital Territory (0.29%), Victoria (0.28%), Northern Territory (-0.19%), South Australia (-0.26%).
Overall month-on-month sales growth: 0.37%.
Year-on-Year Retail Growth (July 2018 - June 2019, seasonally adjusted)
Other retailing (5.20%), Cafés, restaurants and takeaway food services (3.56%), Clothing, footwear and personal accessory retailing (3.32%), Food retailing (3.05%), Department stores (0.93%) and Household goods retailing (-0.80%).
Queensland (5.68%), Victoria (3.47%), Australian Capital Territory (2.49%), South Australia (2.20%), Tasmania (2.05%), Western Australia (1.26%), New South Wales (0.61%), and Northern Territory (-2.92%).
Overall year-on-year sales growth: 2.55%.
