Recent ABS data shows a 0.6% fall in Australian retail turnover for August, seasonally adjusted, with a 2.13% total growth year-on-year – a lower than expected move towards spring.
The Australian Bureau of Statistics retail trade figures for August shows that newspapers and books was most hard hit category to receive negative year-on-year growth figures with a -3.87% downturn. Department stores saw -1.35% slowdown and hardware and building saw -0.47%. The drop in takeaway food was also quite concerning for the industry.
“July month-to-month retail trade figures saw a return to growth for department stores, to see these figures go backwards is of high concern to the sector,” says ARA’s executive director Russell Zimmerman.
“With many historic challenges affecting the Australian industry these past few months, we have expected to see the (retail) sector suffer.”
Alongside Other Retailing, food retailing was up by 2.3% as well as household goods (2.01%) showing moderate year-on-year growth. Clothing, footwear and personal accessories saw 0.89% sales growth in August.
“As we lead into spring racing and the beginning of the Christmas season we expect to see a pickup in both food retailing and clothing, footwear and accessories,” says Zimmerman.
Amid uncertain trading conditions, consumer spending on the overall is predicted to lower in coming months due to Australia’s low wage growth, increased unemployment and higher utility costs and mortgage rates, according to Dun & Bradstreet’s latest Business Expectations Survey. Amazon is front of retailer’s minds as well, adding fuel to the grim outlook.
“As pay packets get consumed by large mortgages and high rental payments, there’s less to be spent on the silly season and less reasons for retailers to smile. This is creating low consumer confidence. Political uncertainty is a drag on confidence as well – it effects short-term cashflow, spending decisions and makes it difficult to plan long-term. For retailers, this means consumers are spending less and saving more. And finally, there’s been a lot of talk of the arrival of Amazon on Australia’s shores and what it means for retail,” says Dun & Bradstreet’s chief executive, Simon Bligh.
According to the ABS retail trade figures for August 2017, all states recorded a drop in growth year-on year, an undesirable sign for the months ahead. Victoria (3.41%) and New South Wales (2.91%) showed the strongest year-on-year growth of the States. With Tasmania (1.92%), the Northern Territory (1.71%), the Australian Capital Territory (1.69%) and South Australia (1.36%) trailing behind. Both Queensland (0.37%) and Western Australia (0.81%) again showed the least year-on-year growth across the nation.