January Retail Up 0.9%

But discretionary spending “a concern” says ARA
Retail turnover climbed just 0.9% in January, ABS figures released today, indicate.

This appears to be good news for retailers following a turnover fall of 0.4% in December last.

The largest contributor to the January rise was ‘Other retailing’ +2.6%, followed by ‘Household goods’ including electronics retail which rose 1.3%, seasonally adjusted, compared to January 2011.

The seasonally adjusted estimate for electronic goods retail remains at zero growth, however.

The news comes as Nab yesterday reported online sales were up 30% y-o-y, and are now stronger than traditional retail, which the Index showed was just 0.4% on last year, for December.

Meanwhile clothing, personal accessory and food were also up in January, however, department stores like Myer and David Jones fell 0.6% in January, the latest Australia Bureau of Statistics figures also shows.

In trend terms, Australian turnover rose 2.5% in January 2013 compared to same time last year.

Over the longer term, food retailing remains the largest contributor to growth (up 0.2 % in trend terms).

The state which was the largest contributor to the rise was New South Wales (+1.3%), followed by Victoria (+1.0%) and Queensland (+0.9).

Surprisingly, there was a slight fall for retail in Western Australia of 0.4%. Over the longer term, Queensland is the strongest contributor to growth (up 0.3 per cent in trend terms).

Australian Retail Association (ARA) Executive Director Russell Zimmerman said the rise was a good sign for the retail sector but needed to be viewed as coming off a low base and in conjunction with year on year figures, which showed a 3 percent increase compared to January 2012.

However, “of concern is department stores reporting the smallest sales increase; this category relies heavily on post- Christmas sales, and it shows consumers are focusing more on smaller purchases, such as food (4.4% rise year on year) rather than discretionary items.”

He said the figures were good news for a struggling retail industry, but added “only time will tell whether the rise can be sustained over the course of 2013”, alluding to this afternoon interest rate announcement by the Reserve Bank.

“Retailers can’t simply keep crossing their fingers for rate cuts and economic relief, at the mercy of economic decision- making structures,” warns ARA boss.

“The ARA is looking to the government and alternative governments to look at real economic reform and stimulating business growth in the lead up to the election.”