Retail turnover growth slow

Australian retail turnover rose 0.2 per cent in April 2016 (3.6 per cent year-on-year), seasonally adjusted, according to the latest Australian Bureau of Statistics (ABS) retail trade figures.

This follows a rise of 0.4 per cent in March 2016. In seasonally adjusted terms, there were rises in cafés, restaurants and takeaway food services (one per cent), household goods retailing (0.3 per cent), clothing, footwear and personal accessory retailing (0.5 per cent), other retailing (0.2 per cent) and department stores (0.4 per cent). Turnover in food retailing fell 0.3 per cent in April 2016.

The trend estimate for Australian retail turnover rose 0.2 per cent in April 2016 following an 0.2 per cent rise in March 2016. Compared to April 2015, the trend estimate rose 3.4 per cent. Online retail turnover contributed three per cent to total retail turnover in original terms.

The ARA believes the reported figure can be attributed to the competition between the major supermarkets and the increasing presence of discount retailer ALDI causing deflation within the supermarket sector.

“With supermarkets accounting for nearly 50 per cent of all retail sales, the soft increase of only 2.16 per cent year-on-year in supermarkets contributed to the low growth of the retail sector of 3.6 per cent,” ARA Executive Director Russell Zimmerman said.

The household goods category represents the highest growth figures at 5.8 per cent (year-on-year), reflecting strength of the housing market and the resulting effect on consumer confidence.

Clothing and footwear maintained a growth of 4.76 per cent (year-on-year) due to heavy discounting – meaning volumes are up at the expense of margins. New players and competition entering the market has also had a significant effect on growth, causing further discounting.

“The figures reported today by the ABS also highlight a number of trends in regards to state-specific retail trade,” Mr. Zimmerman said.

The large service sector based states (Vic 4.3 per cent, NSW 4.95 per cent) are growing strongly, while the traditional mining states (Qld 1.2 per cent, WA 2.04 per cent) are experiencing low growth as they go through a period of structural adjustment.

Tasmania has shown a particularly impressive growth figure of 5.85 per cent (year-on-year), appearing to be off the back of a strong economy and robust tourism industry.

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