The ABS trade figures show that while brighter trade results of 1.2 per cent were achieved in June, they have flat-lined in July with turnover falling 0.8 per cent, seasonally adjusted
“Retailers had cautiously welcomed the significant improvements in trading figures in the past couple of months and sadly their caution proved correct. With Government stimulus from the Federal Budget to families, as well as carbon price compensation families felt secure enough to shop – but now the bottom has dropped out of that and it’s back to the savings bunker they run,” Australian National Retailers Association (ANRA) CEO, Margy Osmond said
The largest contributor to the fall was department stores (-10.2 per cent), followed by other retailing (-2.8 per cent) and clothing, footwear and personal accessory retailing (-0.9 per cent). These falls were partially offset by rises in household goods retailing (2.4 per cent), cafes, restaurants and takeaway food services (0.3 per cent) and food retailing (0.1 per cent).
The large fall in department stores follows a strong rise in the previous month. However, department stores remains the weakest performing industry over the longer term (down 0.5 per cent in trend terms). The strongest performing industry over the longer term is cafes, restaurants and takeaway food services (up 0.8 per cent in trend terms).
However, NRA executive director Gary Black urged the Reserve Bank to keep the results at the front of mind as it considers interest rates tomorrow.
“What these figures show is that the retail sector is far from being on the road to recovery,” he said.
“Retailers continue to do it tough, and there is a general feeling among store owners that perhaps politicians and regulators don’t appreciate just how tough trading conditions are right now.
“While we enjoyed a small bounce in the June figures, we have today seen the correction we expected with a fall in sales from June to July. So regrettably, the June data has not foreshadowed the end of the recessionary trading conditions that we are desperate to see.
“On the positive side, on a year-on-year comparison there have been promising jumps for discretionary categories including household goods, clothing, footwear and personal accessories.
“However the growth we saw in department store sales in June now appears to have been short lived, with the 8 per cent annual rise in June being followed by a 5 per cent fall in July.”
At a state level, Western Australia remains the stand-out performer with growth exceeding 8 per cent over the 12 months.
Queensland has also enjoyed a resurgence in recent months along with New South Wales, while Victoria and South Australia are struggling.
“Overall, these figures show patchy results among states and among various retail sectors. There is no clear trend, and the sector is looking to the RBA for a rate cut fillip tomorrow,” Black said.