February spending figures disappoint
National retail spending increased by 2.68 per cent year-on-year in February (seasonally adjusted), representing lower than expected growth for the industry, after the latest Australian Bureau of Statistics (ABS) trade figures were released yesterday.
Monthly retail turnover fell 0.1 per cent in February, missing market expectations of a 0.3 per cent increase.
Seasonally adjusted, retail spending was $25.69 billion in February compared to the $25.73 billion in January.
Russell Zimmerman, Australian Retailers Association (ARA) executive director, said the moderate growth is disappointing for a number of areas within the retail sector.
“We are starting to see discretionary spend impacted in these figures with the exception of cafes, restaurants and takeaway food services,” Zimmerman said.
Clothing, footwear and personal accessory retailing saw an increase of 0.85 per cent year-on-year, a distinct drop from last month’s increase of 5.18 per cent year-on-year given the hot weather throughout the Eastern seaboard.
Zimmerman said a consolation to these modest figures is the slow but steady improvement in supermarkets with a 3.78 per cent increase year-on-year as consumers allocate more of their spending on essential food items.
February trade figures remain steady across the board with all states showing a steady growth. New South Wales (3.28 per cent) and South Australia (3.94 per cent) lead the pack with stable year-on-year growth. While Victoria (2.62 per cent), Queensland (2.79 per cent), Tasmania (2.73 per cent), Australian Capital Territory (2.34 per cent), Northern Territory (1.15 per cent) and Western Australia (0.38 per cent) also show a moderate growth for February sales.
“Although we are experiencing a cooling off period in retail sales, we are confident that the reduction in the company tax rate for businesses with an annual turnover of less than $50 million will benefit hundreds of thousands small and medium-sized businesses, their employees and the broader Australian community,” Zimmerman said.
“The only way to broadly grow the economy is to deliver further tax cuts to all sized businesses to grow jobs, bring inbound investment and keep Australian businesses investing in Australia.”
Dominique Lamb, National Retail Association (NRA) chief executive, said the figures released today demonstrate the sluggish state of the Australian retail sector, and underlined the urgent need for the recent penalty rate changes to be introduced.
“The retail sector should be the engine room for job creation in the economy, however the lack of consumer confidence has attributed to the ongoing struggle for retailers.
“Once the Fair Work Commission’s (FWC) decision to cut penalty rates begins to take force from July 1, retailers should have a little more breathing space,” she said.
Lamb said the penalty rate changes would help businesses overcomes sluggish consumer spending, with benefits ranging from increased operating hours to spreading the wages budget further, allowing more staff can be hired
ABS reported declines in clothing, footwear and personal accessory retailing (-2.5 per cent) and household goods retailing (-0.4 per cent), in seasonally adjusted terms.
Department stores (0.8 per cent) and food retailing (0.3 per cent) experienced growth, while other retailing, and cafes, restaurants and takeaway food services were unchanged.
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