The Australian Retail Association (ARA) feels so strongly about the lack of movement in interest rates by the Reserve Bank of Australia (RBA) that it has again called for another cut following the release of today’s figures from the Australian Bureau of Statistics (ABS).These reveal that the year-on-year Retail Trade growth for September 2015 has come in at 3.6%.
According to ARA executive director Russell Zimmerman, this figure is less than the 4.6% year-on-year growth of August, with September sales totaling $24.5 billion. He said the growth is less than the sector had hoped for in the run up to crucial Christmas trade.
However, appliance retailers will be pleased that household goods (along with clothing, footwear and personal accessories) continued their trend of strong growth with 6.2% and 6.1%, respectively.
Zimmerman said that the growth in household goods can be attributed to the strength of the housing market in September and television renovations shows such as The Block, while robust clothing, footwear, and personal accessories have been driven by the onset of warmer spring weather.
State by state, Victoria saw the highest growth, coming in at 4.8% year on year.
He also stressed that year-on-year figures provide the most accurate measure of the sector’s performance and are the figures used by most retail businesses in their own reporting. September 2015 sales rose 0.4% over August 2015.
Christmas growth expected to be around 4%
“To ensure the resilience of Christmas spending, the ARA would have hoped to see sales growth of closer to 5%, especially off the back of the last seven months of above 4% growth,” Zimmerman said.
“While we don’t expect to see Christmas sales dip below the $45.2 billion of last year, our early prediction is that Christmas revenue growth will be around the 4% increase of 2014.”
The ARA’s Christmas spending prediction figures will be available late next week.
“While the September results are not dire for the retail sector, the one percent fall in growth from August levels indicates that some change is required to boost consumers’ ability to spend, and the ARA would like to see that change via a December reduction in interest rates,” Zimmerman added.
Year on year retail growth (September 2014 to September 2015 seasonally adjusted)
By category:
Food, 2.8 percent; household goods, 6.2 percent; clothing, footwear and personal accessories, 6.1 percent; department stores, three percent; other retailing, 3.1 percent; cafés, restaurants and takeaway foods, 2.2 percent.
By state:
NSW, 4.2 percent; Victoria, 4.4 percent; Queensland, 2.8 percent; South Australia, 3.9 percent; Western Australia, 2.2 percent; Tasmania, three percent; Northern Territory, 0.9 percent; and Australian Capital Territory, two percent.