Retail sales rise

But fail to meet forecasts.

Australian retail turnover rose 0.1% in January 2018, seasonally adjusted, according to the latest Australian Bureau of Statistics (ABS) Retail Trade figures and follows a 0.5% fall in December 2017.

“There were offsetting movements by industry with rises in other retailing (1.0%), household goods  (0.1%), and cafes, restaurants and takeaways (0.1%) being offset by falls in clothing, footwear and personal accessories (-0.7%) and department stores (-0.6 %),”  ABS quarterly economy wide surveys director, Ben James said. There was an increase in online retail turnover that contributed 4.7% to total retail turnover in original terms in January 2018 up from 3.6% in January 2017.

In seasonally adjusted terms, there were rises in Queensland (0.4%), Victoria, Western Australia and Tasmania (0.3%). The Australian Capital Territory was relatively unchanged, however there were falls in New South Wales (-0.2%), South Australia (-0.6%), and the Northern Territory (-0.5%).

Commenting on the figures, National Retail Association (NRA) CEO, Dominique Lamb said while there was an improvement on the December 2017 slump, retail sales were still below what was expected and well below forecasts that the increase would be closer to 0.4%.

“Today’s figures are not cause for panic, but they do show that retail is experiencing a sluggish start to 2018 and it is vital that measures are in place over the coming months that are conducive to strong retail sales. For instance, there need to be trading hours laws in place that reflect the needs and wants of consumers in 2018 and penalty rates need to strike the right balance between a wage that is both fair and affordable,” Lamb said.

The Australian Retailers Association (ARA) said the January 2018 trade figures represent a timid post-Christmas trade, with a 2.09% total growth year-on-year.

According to ARA executive director, Russell Zimmerman, the ARA and Roy Morgan post-Christmas sales predictions are close to the actual post-Christmas trade results released by the ABS.

“We predicted a 2.9% increase in post-Christmas trade, forecasting Australians to spend almost $17.9 billion from December 26, 2017 to January 15, 2018. As this forecast is over a three-week period the ARA and Roy Morgan will analyse these results against the December and January trade results to see if our predictions are on track.”

The strongest retail category in January was Other Retailing (3.22%), which was primarily driven by online retail which grew 3.23% year-on-year, Zimmerman said.

“The ARA and Roy Morgan predicted online retail to grow the strongest of all categories in post-Christmas trading, forecasting a 4.02% increase in post-Christmas trade,” he said.  “With the constant increase in online sales, we believe online retail will grow even bigger as we progress through the year.”

However, he said with retail figures continuing to underperform, landlords needed to understand how escalating rental costs affect an already struggling industry and current rental increases are unsustainable with rental prices increasing 5% on average. “Retailers are looking for landlords to meet them halfway and shoulder some of the burden. Without retail landlords won’t survive, so we need support now,” he said.

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