Retail turnover picks up

Welcome news for department stores.

Australian retail turnover rose 0.4% in May with department stores and clothing gaining rises of 3.9% and 2.2% respectively, according to the Australian Bureau of Statistics (ABS).

The May results cement a second consecutive month of solid sales for the sector following a slow start to 2018.

National Retail Association (NRA) CEO Dominique Lamb said that the transition to the colder months had helped department stores and clothing rebound strongly after poor showings in April.

“Retail has now recorded two consecutive months of solid rises in turnover and we’re optimistic that it means that the sector has turned the corner following a modest start to 2018,” she said.

“The April figures were a relief after sales stalled in the opening months of 2018, but the May results are hopefully a sign that retail is about to kick on and have a successful second half to 2018,” she said.

The NRA expects to see department stores and clothing sales continue to rise in the coming months as Aussies flock to the shops to cash in on winter shopping bargains, Lamb said.

Across the state and territories, the highest rises occurred in Tasmania (1.5%) and South Australia (1.4%), with only Western Australia experiencing a fall in turnover (0.5%).

Taking a slightly different perspective on the results, the Australian Retailers Association (ARA) said although May trade figures were above market expectations, they represented a weaker lead-in to winter than retailers would have liked, displaying a 2.49% total growth year-on-year.

ARA executive director, Russell Zimmerman said due to this slow lead-in, May retail trade results portray a dim outcome for retailers across the country.

“Although the 2.49% year-on-year growth in May seems quite dismal, we need to take into account that this was before the second stage of the penalty rate reduction was implemented and the low-value import threshold (LVIT) GST was introduced,” Zimmerman said.

“While the ARA is concerned with this meek growth, the retail industry received two big wins on July 1 and we look forward to the benefits this will bring retailers, their staff and the overall economy,” he said.

The biggest growth across the ABS retail categories were liquor (5.95%), other retailing (5.77%) and specialised food (5.06%) that all received over 5% year-on-year growth. “Another positive for May trade saw department stores receiving their best figures since October last year, this could be because they began their mid-year sales earlier.”

Across the country, the Northern Territory (4.27%) continues to improve its upward trend, closely followed by Tasmania (3.82%) and Victoria (3.69%). New South Wales (2.86%), South Australia (2.35%) and the Australian Capital Territory (2.22%) remain steady, while Queensland (1.97%) received minimal year-on-year growth. Western Australia (-0.74%) continues to struggle, returning to negative figures and significantly lagging behind the rest of the country.

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