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Retail spending up, online spending slows

spending, dollar, money, graphReports by the Australian Bureau of Statistics and NAB have noted that, for the month of June, retail sales rose while online sales slowed.

The ABS noted in its latest report for June 2018 that the retail industry turned over approximately $26.8 billion, a 0.3 per cent increase over the previous month (0.4 when seasonally adjusted), which followed a rise of 0.4 per cent for the two preceding months.

National Retail Association Dominique Lamb said that while there was still a long way to go for the domestic industry, June’s modest rise suggests consumer confidence may be returning.

“Food retailing has again led the charge…which reflects a very strong trend we’re seeing right across the sector,” said Lamb.

According to the report, food retailing rose by 0.4 per cent in June, with supermarket and grocery stores (0.3 per cent), liquor retailing (0.2 per cent) and specialised food retailing (0.1 per cent) following suit.

“Experiential retailing in general, which is highly focused on food, has exploded and it has really become the foundation of all modern consumer habits,” Lamb continued.

Clothing, footwear and personal accessories rose 0.7 per cent for the month, while department stores rose 0.5 per cent, and cafes, restaurants and takeaway food services rose 0.2 per cent.

Australian Retailers Association (ARA) executive director Russell Zimmerman noted that the healthy results were linked with the increase in business confidence reported by Roy Morgan earlier this month.

“Business confidence often falls after the Federal Budget; however, this increase shows greater strength in the market, giving retailers much-needed assurance to invest in their businesses and execute product strategies,” Zimmerman said.

The June trade figures represented ‘a fair trade’ for the end of financial year, with 2.87 per cent total growth year-on-year, according to the ARA.

Zimmerman said the positive growth is mostly due to the strong trade in clothing, footwear and personal accessories and food retailing.

“Winter finally hit in June as we saw the clothing, footwear and personal accessories category grow by 5.26 per cent year-on-year,” he said.

“Food retailing also saw a yummy result, growing 4.31 per cent in June with supermarkets making a tasty comeback by having their strongest growth since June last year.”

Online spending slows

The ABS report also notes online retail turnover contributed 5.7 per cent of total retail turnover in June 2018, a rise from 5.6 per cent in May 2018, and an increase from the 4.1 per cent recorded in June 2017.

“The entire retail landscape in Australia has changed dramatically, and retailers all over Australia have been pivoting their business models accordingly, including more time and resources into creating coordinated, omni-channel approaches and improving their fulfilment and delivery processes,” said Lamb.

In the NAB Online Retail Sales Index for June 2018 it was found that online retail sales slowed in June, at 1.2 per cent, with Australians spending an estimated $26.5 billion in the 12 months to June on online retail.

Domestic online retailer sales increased by 1.4 per cent month over month, while international competition fell by 0.2 per cent compared to last month.

Specifically, it seems rapid growth in the department and variety stores category assisted the upward trend, growing by 9 per cent month over month, and 38.4 per cent annually.

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