The Executive Director of the Australian Retailers Association, Russell Zimmerman, said September retail trade figures from the Australian Bureau of Statistics showing annual growth of 2.51% showed a sector “marking time” in the face of various stimuli, and that the only possible interpretation is that Australian retail is “stuck in neutral.”
Noting month-on-month figures showing a September rise of 0.18% after a 0.42% lift in August, Mr Zimmerman said today’s figures were “frustrating” and that the retail sector seemed to be defying everything thrown at it.
“One would have to express some frustration that after a 3% minimum wage rise, multiple cuts in official interest rates and the $1,080 PAYE tax rebates that a large majority of Australians will have received by now, these measures appear to have made no appreciable impact to date on retail spending,” Mr Zimmerman said.
“Whichever way you cut it, the retail sector is marking time – stuck stubbornly in neutral,” he added.
Mr Zimmerman said that three months from Christmas, there had been an expectation in some quarters today’s figures would show the beginning of a significant upswing in turnover, but that these judgements were premature.
“The ARA has been cautious – conservative, even – in its assessment of retail trade data in recent months, and wary of making grandiose predictions from them, and that caution seems justified now,” Mr Zimmerman said.
“These numbers aren’t dreadful; they’re not a success; they’re just flat: with the 50-year retail average sitting at 3.8% annual growth 50% higher than the September data, it’s disappointing and frustrating,” he said.
Mr Zimmerman said there was ample evidence that there was plenty of money around the economy, but that people were choosing to save and pay down debt rather than get out and spend in retail stores.
“The Reserve Bank of Australia, for instance, has noted residential mortgages in Australia are on average some two years ahead on repayments, which offers a big clue as to where that money is going,” Mr Zimmerman said.
Mr Zimmerman said despite the surprisingly soft September numbers, there were some positives to be noted.
“Year-on-year growth in WA – after a long period of flat or negative growth – has rebounded to 3.45% in the year to September, and the NT is in the black for the first time in a year, so it isn’t all doom and gloom,” he said.
“Looking across the data breakdowns by category, spending on clothing is up this month, which possibly reflects the onset of warmer weather across much of the country, so that’s also a positive,” Mr Zimmerman added.
“In other areas it’s a bit of a mixed bag – spending on electrical goods, year-on-year, is at its strongest in twelve months, but furniture spending has contracted for a tenth consecutive month,” he said.
Mr Zimmerman said the numbers amounted to a call to arms to consumers to spend up in the lead-up to Christmas if they wanted to head off longer-term consequences from flat retail sales growth.
“I’d just ask consumers – before banking every extra cent or paying off more debt – to remember that retailers employ almost one in ten working Australians; everyone knows people who work in our industry, and the thing that keeps those jobs safe is business confidence off the back of sound retail trade,” he said.
“Coming into Christmas, buy that extra present for your mum or your dad; treat the kids to “just one more;” and buy yourself something you hadn’t planned on: every little bit helps,” Mr Zimmerman concluded.
Monthly Retail Growth (August 2019 – September 2019, seasonally adjusted)
Other retailing (0.80%), Cafés, restaurants and takeaway food services (0.62%), Food retailing (0.10%), Household goods retailing (-0.05%), Department stores (-0.22%), and Clothing, footwear and personal accessory retailing (-0.53%).
Tasmania (1.01%), Western Australia (0.68%), New South Wales (0.28%), South Australia (0.18%), Australian Capital Territory (0.12%), Northern Territory (0.08%), Victoria (0.05%), and Queensland (-0.12%).
Overall month-on-month sales growth: 0.18%.
Year-on-Year Retail Growth (October 2018 – September 2019, seasonally adjusted)
Clothing, footwear and personal accessory retailing (5.05%), Other retailing (3.48%), Food retailing (3.13%), Cafés, restaurants and takeaway food services (1.32%), Department stores (0.76%) and Household goods retailing (0.67%).
Australian Capital Territory (4.28%), Queensland (4.15%), Western Australia (3.45%), Victoria (2.55%), Tasmania (2.55%), South Australia (1.66%), New South Wales (1.30%), and Northern Territory (0.15%).
Overall year-on-year sales growth: 2.51%.