Spending off to solid start
Australian retail spending rose three per cent, seasonally adjusted, in January 2015 compared to January 2014, according to the latest spending figures released by the Australian Bureau of Statistics (ABS).
Total retail spending rose 0.4 per cent for the month to $23.880 billion, up from $23.79 billion in December, however, was a slightly lower year on year figure compared to December, which recorded a rise of 4.1 per cent compared to December 2013.
Australian Retailers Association, executive director, Russell Zimmerman, said retailers reported strong sales in the first week of January but experienced a tougher trading environment towards the end of the month.
“Boxing Day was huge for retailers this year and many consumers carried on bargain hunting well into the first half of January,” Zimmerman said.
Department stores recorded the highest amount of growth for January at 2.2 per cent; followed by cafes, restaurants and takeaway food services; two per cent; other retailing, one per cent; and household goods retailing, 0.7 per cent.
A decline in sales was witnessed in food retail; 0.7 per cent, and clothing, footwear, and personal accessory retailing, 0.1 per cent.
“It will be interesting to see the results of February retail sales when this information is released next month, as Valentine’s Day usually provides retailers with another welcome boost in sales,” Zimmerman said.
National Retail Association (NRA) CEO, Trevor Evans, said the positive figures confirmed the anecdotal evidence from retailers, and he said comparatively lower petrol prices could be the reason for much of the additional spending.
“Recent research by Citibank has shown that lower petrol prices are worth between $6 billion and $8 billion to Australian retailers, because of the additional money they put into consumers’ pockets,” Evans said.
“These figures for January – following on from a strong Christmas trading period – indicate that consumers are certainly feeling more confident and cashed up than they were 12 months ago, and the extra money they are saving at the bowser is bound to be contributing to that.”
In seasonally adjusted terms the states which displayed rises were Tasmania, 1.9 per cent – the state’s best monthly result in more than a year; Queensland, 1.2 per cent; Victoria, 0.5 per cent; and Western Australia, 0.1 per cent. There were falls in the Australian Capital Territory by 1.9 per cent; and in South Australia, 0.1 per cent; while NSW was relatively unchanged.
“The differing results among the states and sectors show the retail industry’s recover is still patchy,” Evans said.
“However, these numbers continue a pattern of modest growth that has run almost unbroken over the last 18 months. In next month’s trade figures we should see the early results of the February rate cut beginning to wash through.
“We are also seeing a number of large international chains opening their doors or expanding their presence throughout Australia. These are all positive signs for the Australian economy and the retail sector,” he said.
Australian National Retailers’ Association CEO, Anna McPhee, said the rise in consumer spending in January is consistent with an uptick in consumer confidence for the month.
The ABS experimental online series recorded a 24 per cent increase in January 2015 compared to January 2014. According to the ABS, online sales represent around 2.75 per cent of total retail sales.
“Today’s result is the eighth consecutive monthly rise in retail spending and retailers will feel buoyed by the positive start to 2015. Time will tell if more needs to be done to stimulate further improvements in retail activity and the recurring benefits this delivers to the economy more broadly,” said McPhee.
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