National retail spending’s ‘soft’ rise in April

shoppingbags, shopping, bag, walking, streetNational retail spending rose 3.4 per cent year-on-year in April 2016, according to the latest Australian Bureau of Statistics (ABS) figures, with food retailing posting a soft figure of 2.4 per cent year on year.

Total retail spending, seasonally adjusted, was $24.98 billion in April, up from $24.95 billion in March, representing a 0.2 per cent increase on a monthly basis.

The Australian Retailers Association (ARA) said the figures can be attributed to the competition between the major supermarkets and the increasing presence of discount retailer Aldi, causing deflation within the supermarket sector.

“With supermarkets accounting for nearly 50 per cent of all retail sales, the soft increase of only 2.16 per cent year-on-year in supermarkets contributed to the low growth of the retail sector of 3.6,” said Russell Zimmerman, executive director, ARA.

Clothing and footwear has maintained growth of 4.76 per cent year on year, which, according to Zimmerman, is due to heavy discounting, meaning volumes are up at the expense of margins. New players and competition entering the market has also had a significant effect on growth causing further discounting.

“The figures reported today by the ABS also highlight a number of trends in regards to state specific retail trade,” he said.

The large service sector based states (VIC 4.30 per cent, NSW 4.95 per cent) are growing strongly, while the traditional mining states (QLD 1.20 per cent, WA 2.04 per cent) are experiencing low growth as they go through a period of structural adjustment.

Tasmania has shown a particularly impressive growth figure of 5.85 per cent year-on-year, appearing to be off the back of a strong economy and robust tourism industry.

In monthly seasonally adjusted terms, there were increases in household goods retailing, 0.2 per cent; clothing, footwear and personal accessory retailing, 0.8 per cent; cafes, restaurants and takeaway food services, 0.3 per cent; and other retailing, 0.2 per cent. Food retailing was unchanged.

Department stores fell 0.1 per cent in trend terms in April 2016.

The following states and territories rose in trend terms in April 2016: New South Wales (0.3 per cent), Victoria (0.2 per cent), South Australia (0.3 per cent), Western Australia (0.1 per cent), the Australian Capital Territory (0.5 per cent) and Tasmania (0.4 per cent). Queensland (0.0 per cent) and the Northern Territory (0.0 per cent) were relatively unchanged in trend terms.

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