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Retail spend up for second straight month

 

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Retail spending has risen for a second straight month, with the Australian Bureau of Statistics (ABS) reporting turnover rose by a seasonally adjusted 0.6 per cent in May.

This follows a rise of 1 per cent in April and triples the market’s estimate of a 0.2 per cent rise.

Executive director of the Australian Retailers Association (ARA), Russell Zimmerman said this illustrates a positive outlook for the industry as we head into winter.

“Retail figures have improved from April across the board with the cold winter snap driving consumers indoors,” he said.

“As we enter the colder months we will see retail growth remain strong, giving retailers breathing room in the tough trading environment.”

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The biggest increase was in household goods (2.2 per cent) followed by clothing, footwear and personal accessory retailing (1.3 per cent), cafes, restaurants and takeaway food services (0.6 per cent), other retailing (0.6 per cent), and food retailing (0.1 per cent).

Department stores didn’t fare as well, suffering a fall of 0.7 per cent.

Each state rose during May expect for Queensland, which remained unchanged, and the Northern Territory, which experienced a small drop of 0.1 per cent.

New South Wales had the largest rise at 1.3 per cent followed closely by Victoria’s 1.2 per cent.

Impact of penalty rates

The National Retail Association (NRA) CEO Dominique Lamb said the rise is positive and that conditions will continue to improve following the reduction in Sunday penalty rates.

“With changes to Sunday penalty rates having just come into effect, we are hopeful that this will breathe new life into the industry as we begin the march towards Christmas.

“The reforms to retail penalty rates will help boost consumer spending, with benefits ranging from increased operating hours to spreading the wages budget further and allowing more staff to be hired.

“The NRA is confident that the changes in penalty rates will result in stronger turnover results for retail in the coming months.”

Lamb also said that the Reserve Bank’s decision to leave interest rates on hold at an historic low of 1.5 per cent was “wise”.

“Maintaining low interest rates over time will steadily see consumer confidence return to the sector and we do expect the market to pick up between now and Christmas.”

retail spending

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