Retail spending figures ‘extremely frightening’
Retail spending for September showed disappointing results again with nominal sales growth flat at 0.0 per cent in seasonally adjusted terms, lagging market expectations of a 0.4 per cent increase, according to the Australian Bureau of Statistics (ABS).
Seasonally adjusted retail spending totalled $25.9 billion in the month.
The September trade figures represent a disappointing move towards Christmas, with a 1.44 per cent total year-on-year growth – well below the seasonally adjusted long-term average.
Russell Zimmerman, ARA Executive director, said these figures are extremely frightening this close to the biggest trading period of the year, and urges the Government to refocus on increasing disposable income.
“With Christmas not too far away, and the ARA Roy Morgan Pre-Christmas Sales Predictions to be released in a couple of weeks, these figures are in all honesty alarming,” Zimmerman said.
“The category that’s been hit hardest in September was Household Goods with a -1.14 per cent year-on-year growth.”
Zimmerman said the softness in Sydney house prices are starting to impact consumer spend on household goods with Hardware and Building (-4.22 per cent), Electrical Goods Retailing (-1.12 per cent), and Furniture (2.98 per cent) all showing a big drop in year-on-year growth.
“These figures show an obvious weakness in consumer confidence,” Zimmerman said. “If Australians aren’t feeling wealthy they will spend less, and this weakness is an issue across the board.”
The only retail category showing a slight increase was Food Retailing (2.85 per cent), however this growth is still nowhere near the growth figures the retail industry received at the start of the year.
All states have again received a drop in year-on-year growth, an undesirable sign for Christmas. Although dismal, New South Wales (2.34 per cent), Tasmania (2.33 per cent), Victoria (2.29 per cent) and South Australia (2.16 per cent) showed the strongest year-on-year growth of the states. While both the Australian Capital Territory (1.17 per cent) and Queensland (0.23 per cent) remained quite low, Western Australia (-1.19 per cent) and the Northern Territory (-1.46 per cent) received negative figures, a worrying outlook for the months ahead.
Zimmerman believes the Government needs to act fast to stimulate the economy. “There has been a lot of change in the Australian retail environment this year, and with change comes uncertainty, but one thing is for sure, Christmas is coming.”
The three months of no growth shows retailers are facing a challenging future, according to the National Retail Association (NRA).
Dominique Lamb, NRA chief executive officer, said the ongoing flat results demonstrated the difficult circumstances retailers were confronting.
“These results demonstrate the importance of every measure that gives business any opportunity to remain competitive – such as gradually reducing weekend penalty rates to more sensible levels,” Lamb said.
“It also should give government reason to pause and consider the impacts of their decisions every time they roll out policy that will add to cost or red tape for retail business owners.”
Lamb said the results showed the importance of the upcoming Christmas and Boxing Day shopping period.
“The coming months will be make or break for many retailers,” Lamb said. “They will be looking for a strong Christmas result to carry them through the new year.”
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