Abbott Government’s first budget delivers blow to retail spending: ANRA

RETAIL figures recorded its biggest monthly fall in more than a year when retail sales for May were released today, according to analysis from the Australian National Retailers’ Association (ANRA).

The Australian Bureau of Statistics (ABS) released retail figures today showing a decrease of 0.5 percent in May compared to April. April’s figure was also revised down to record the first fall in eleven months (down 0.1%). Throughout the year to May retail turnover rose 4.6 percent.

ANRA CEO Margy Osmond said the Abbott government’s first Budget has halted much of the momentum the sector generated over the past year.

“Today’s figures are exactly what retailers were hoping to avoid. The discretionary spend categories have been hit the hardest with consumers pulling back on spending in the lead up to and following the Federal Budget.

“The biggest fall was seen in department stores (down 2.6 per cent), erasing any gains recorded in April. Clothing, footwear and personal accessories, other retailing and household goods also recorded falls in May.

“This is the third month in a row the clothing, footwear and personal accessories, household goods and other retailing categories have recorded decreases.

“Food continued its resilience, recording the only rises amongst the categories in May up 0.1 per cent and cafes, restaurants and takeaway food services also up 0.1 percent.

“Food has now outperformed non-food for seven of the last twelve months. Year-on-year food is up 6.8 percent while non-food is up only 2.1 per cent and on shaky ground.

“Looking to the states and territories, Victoria recorded the biggest fall – down 1.1%. Contributing to the state’s drop in May was recreational goods (down 10%), speciality foods (down 6%) and department stores (down 5%).

“It’s also the fifth consecutive month of declining sales for Western Australia and it isn’t a rosy picture for the ACT either, where retail sales have declined for six out of the last seven months.

“Year-on-year, Tasmania continues to be the strongest performer amongst the states and territories – up 8.8 per cent. The ACT was the worst performer – down 0.9 per cent.

“Consumers are showing all the signs in May of being spooked by the Federal Budget and its cuts to family benefits. We normally see some softening of confidence after a Budget with a pick in the June figures.  With many aspects of the Budget facing a battle to get through the Senate and ongoing uncertainty, we wouldn’t expect retail sales to bounce back for a few months yet,” said Ms Osmond.

www.anra.com.au

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