ABS and NAB retail results for March show ongoing growth in the Australian retail sector, with the depreciation of the Aussie dollar continuing to benefit local online retailers.
Australian retail results for March showed the sector heading in the right direction, with ABS retail trade figures showing turnover growing by 0.4 percent in March.
According to the National Retail Association (NRA), “the Australian retail sector is continuing to show signs of positive long-term growth.”
NRA Industry Research & Data Analyst Cameron Meiklejohn said the annualised growth rate has come in at 3.7 percent, a continuation of what the industry recorded in January and February.
By industry, the strongest performers over March (in seasonally adjusted terms) were clothing, footwear and personal accessory retailing (1.1 percent growth) and food retailing (o.6 percent growth). Cafes, restaurants and takeaway food services remained unchanged and department stores fell by 0.5 percent.
In seasonally adjusted terms, retail sales rose in Victoria (0.5 percent), New South Wales (0.4 percent), Western Australia (0.7 percent), Queensland (0.2 percent), South Australia (0.2 percent) and Tasmania (0.6 percent). There were falls in the Australian Capital Territory (-0.6 percent) and the Northern Territory (-0.2 percent).
Meiklejohn said the ABS statistics revealed a clear difference between New South Wales and Victoria, and the rest of Australia.
“While the national average growth rate is 3.7 percent, we’re seeing that sales in New South Wales and Victoria are growing at a far greater rate, with growth of 5.0 and 4.7 percent, respectively,” Meiklejohn said.
“The National Retail Association is still anticipating annual sales growth of 4.4 percent in 2015/16, and as a result we are expecting to see an improvement in turnover across the final quarter of this financial year.”
The NAB Online Retail Sales Index
The NAB Online Retail Sales Index shows relatively strong month-on-month growth of 1.8 percent for online retail over March. NAB estimates the Australian online retail market to be worth $19.3 billion over the 12 months to March 2016, equivalent to around 6.6 percent of the traditional retail sector (which totalled $294.4 billion in the year to February 2016, according to the ABS).
Over the past year, traditional bricks-and-mortar retail has grown 6.8 percent, outpaced by online retail, which grew 12.4 percent year-on-year.
Both corporate and SME retailers have shown strong growth over the period. Corporate online retailers grew 12.4 percent year-on-year, while SME online retailers grew 10.6 percent year-on-year.
By category, media, takeaway food and homewares and appliances have shown the strongest growth. Takeaway food grew 45.2 percent year-on-year, with solid monthly sales growth of 4.6 percent. Homewares and appliances grew 5.8 percent month-on-month, with media growing 4.0 percent. Daily deals sales continued to decline, with consumer interest in this retail sector remaining low.
The strong March sales results were driven by domestic online sales growth (1.9 percent), although international online sales also grew strongly (1.2 percent). For March, domestic online spend accounted for 81 percent of total online spend.
Looking at the year-on-year growth rates, domestic online sales continue to outpace international sales at 15.8 percent versus 0.1 percent, respectively. The depreciation of the Australian dollar has led to a clear increase in the share of domestic online retailing.