Strong increase in ABS household good figures.
The bright light in the Australian Bureau of Statistics (ABS) retail trade figures released yesterday is the household goods sector with a 5.8% increase (year-on-year). The Australian Retailers Association (ARA) believes this figure can be attributed to television shows like My Kitchen Rules which encourage consumers to purchase new household products demonstrated by these programs.
Meanwhile, year-on-year total retail sales sit at 3.6%. Retail turnover rose by 0.4% in March.
ARA Executive Director Russell Zimmerman said the soft sales figures are a sign that the retail sector is still facing challenges. He said that the pending Federal election is also weighing on sales and confidence and creating uncertain business conditions. “Consumers are looking for real economic leadership.”
“Overall, the sales figures in March illustrate that consumers are still holding on to their purse strings and discretionary spending remains tight with there being little doubt an extended Indian Summer has impacted on department store sales with deflation hitting food sales.
“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. March 2016 sales showed a 0.4 percent increase over February 2016 (month-on-month).
“Overall, the figures may be a reflection of consumer nervousness in discretionary spending due to instability with the Federal election and weak indicators from overseas. The federal election couldn’t come soon enough to restore certainty,” Zimmerman said.
NRA industry research and data analyst, Cameron Meiklejohn (pictured above) agreed that the below-average growth in March, suggests that there continues to be some level of caution in consumer spending.
“At a national level, there is still strong growth in some categories with clothing and fashion (7.9%) and hardware, building and garden supplies (6.2%) both performing well.
“The high volume of sales in established residential properties across the eastern states, and Sydney and Melbourne in particular, has been a particular factor in the recent performance of the hardware category, although this category has started to contract.”
The ABS found that there were rises in food retailing (0.6%), clothing, footwear and personal accessory retailing (1.1%), other retailing (0.4%) and household goods retailing (0.1%). Turnover in cafes, restaurants and takeaway food services was relatively unchanged (0.0%). Department stores fell (-0.5%).
In seasonally adjusted terms, there were rises in Victoria (0.5%), New South Wales (0.4%) Western Australia (0.7%), Queensland (0.2%), South Australia (0.2%) and Tasmania (0.6%). There were falls in the Australian Capital Territory (-0.6%) and the Northern Territory (-0.2%).