Retail spending ‘patchy’ but industry is optimistic about strong Christmas period

Retail spending has increased for the third consecutive month, however spending in department stores and household goods retail —  in particular electronics — is down, according to the August Retail Trade figures released yesterday by the Australian Bureau of Statistics.

The seasonally adjusted estimate showed there was a slim increase of 0.1 per cent in retail spending for August. Both July and June showed stronger increases in turnover of 0.4 per cent and 0.6 per cent respectively.

The weakest performing categories were department stores, down 2.9 per cent, and household goods retailing was down 0.8 per cent, seasonally adjusted.

Within the household goods retailing category, the seasonally adjusted estimate fell for electrical and electronic goods retailing by 0.8 per cent, hardware, building and garden supplies retailing  was down 1.2 per cent, and furniture, floor coverings, houseware and textile goods retailing was down 0.3 per cent.

The strongest performing categories in August were supermarkets, food retailing, cafes and restaurants, clothing and other retailing.

On a state-by-state basis, Victoria was the strongest, in seasonally adjusted terms, with a rise of 0.7 per cent, followed by Northern Territory 1.7 per cent and Western Australia 0.1 per cent. South Australian and Tasmanian figures were unchanged.

The states which recorded falls were Queensland, down 0.6 per cent, the Australian Capital Territory, down 0.4 per cent and New South Wales, down 0.1 per cent.

Year on year retail growth rose 5.1 per cent in August 2014, seasonally adjusted, compared to August 2013.

The National Retail Association (NRA) said the positive momentum, following a dive after the budget, indicated consumers were on-track for a much-improved Christmas shopping season.

NRA CEO Trevor Evans said the results were setting the scene for the summer months and the lead up to Christmas, making retailers hopeful they’ll have a much-needed strong finish to 2014.

“Results are still patchy state to state and category to category, but it’s pleasing to see that generally consumers are showing some signs of confidence once again after a brief downturn earlier this year,” Evans said.

“The downturn in April and May was largely due to speculation around the possible impacts of the Budget, but its clear consumers have come to realise that the measures in the Budget were not as drastic as they had been led to believe.

“The ANZ/Roy Morgan consumer confidence survey for this week also supports the theory shoppers are feeling more upbeat, with the index stabilising and rising by 0.7 per cent for the week ending September 28. All signs are pointing to an optimistic outlook for consumers and retailers.”

The Australian Retailers Association (ARA) had a more wary response and said the figures indicated the retail industry needed interest rates to remain low in the lead up to Christmas.

“It will be interesting to see whether next month’s figures show a rise in both household goods and department store retailing as we welcome the start of spring,” said ARA executive director Russell Zimmerman.

“While we are hopeful that September figures will continue to highlight positive growth with the change in season encouraging consumers to update their wardrobes, it is imperative that the Federal Government and RBA do all that they can to ensure that retail trade is fully supported. The festive season is also fast approaching and interest rates must remain low in order to support business,” Zimmerman said.

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