Federal Election and soft retail trade sales - ARA

NATIONAL retail spending saw a 3.6 percent growth (year-on-year) in March 2016, according to the Australian Bureau of Statistics (ABS), with household goods standing out with a 5.8 percent increase (year-on-year).

The ARA believes this reported figure can be attributed to television shows like My Kitchen Rules encouraging consumers to purchase new household products demonstrated by these programs.

ARA Executive Director Russell Zimmerman said the soft sales figures are a sign that the retail sector is still facing challenges. With the pending Federal election also weighing on sales and confidence creating uncertainty business and consumers are looking for real economic leadership.

Peak retail industry body the Australian Retailers Association (ARA) said the seasonally adjusted monthly retail trade figures (month-on-month) reported today by the ABS. Year-on-year retail sales sit at 3.6 percent, highlighting soft retail sales growth in a number of categories.

The boost from the RBA interest rate cut along with Federal Budget tax cuts are what the Doctor ordered to boost consumer and business confidence.

“Overall, the sales figures in March illustrate that consumers are still holding on to their purse strings and discretionary spending remains tight with there being little doubt an extended Indian Summer has impacted on department store sales with deflation hitting food sales," Mr Zimmerman said.

"Year on year figures provide the most accurate measure of the sector’s performance and are the figures used by most retail businesses in their own reporting. March 2016 sales showed a 0.4 percent increase over February 2016 (month on month).

“Overall, the figures may be a reflection of consumer nervousness in discretionary spending due to instability with the Federal election and weak indicators from overseas. The federal election couldn’t come soon enough to restore certainty.

“Retailers are facing significant cost pressure at the moment with this week’s Federal Budget and interest rate cut being a positive, we are also needing the Government and Opposition to step in and increase consumer confidence by showing strong economic leadership and reform as part of their election campaigns,” Mr Zimmerman said.

MONTHLY RETAIL GROWTH (February 2016 – March 2016 seasonally adjusted)

Household goods retailing (0.1%), Other retailing (0.4%), Food retailing (0.6%), Clothing, footwear and personal accessory retailing (1.1%), Cafes, restaurants and takeaway food services (0.0%) and Department stores (-0.5%).

Northern Territory (-0.2%), South Australia (0.2%), Australian Capital Territory (-0.6%), Victoria (0.5%), Tasmania (0.6%), Western Australia (0.7%), New South Wales (0.4%) and Queensland (0.2%). 

YEAR-ON-YEAR RETAIL GROWTH (March 2015 – March 2016 seasonally adjusted)

Household goods retailing (5.8%), Cafes, restaurants and takeaway food services (3.0%), Food retailing (2.9%), Clothing, footwear and personal accessory retailing (5.2%), Other retailing (3.6%) and Department stores (1.7%).

New South Wales (4.9%), South Australia (3.1%), Tasmania (3.8%), Victoria (5.3%), Australian Capital Territory (6.9%), Western Australia (1.2%), Queensland (0.9%) and Northern Territory (1.1%).

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Since 1903, the Australian Retailers Association (ARA) has been the peak industry body representing Australia’s $300 billion retail sector, which employs over 1.2 million people. The ARA ensures retail success by informing, protecting, advocating, educating and saving money for its 5,000 independent and national retail members throughout Australia. Visit www.retail.org.au or call 1300 368 041.

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