Retailers urge the Federal Government to act fast on ensuring a stable economy for the future of retail

 

PEAK retail industry body the Australian Retailers Association (ARA) said the seasonally adjusted fall (-0.5 percent) in monthly retail trade figures (month-on-month) reported by the ABS followed a 0.2 percent rise in April 2014.

Year on year retail growth fell 4.6% in May 2014, seasonally adjusted, compared to May 2013.

ARA Executive Director Russell Zimmerman said May trade results -0.5% were disappointing for retailers. Retailers have been enduring struggles with the unexpected change in weather and while sudden winter weather showed glimpse of hope for winter stock, this was not sufficient as resulted by the buying behaviours of consumers.

“Retailers were hoping that Mothers Day in May would lift buying behaviours and although this did lift some sales, it did not compete with the unseasonably warm weather which caused consumers to hold off purchasing winter products.

“Department stores experienced a tough month during May (fall of -2.6%) and clothing, footwear and personal accessory retailing (fall of -2.3%). The unseasonably warm weather in May caused consumers to hold off on purchasing their winter goods. Retailers particularly in fashion experienced major struggles due to this.

“The effects of the Federal Budget announcement has obviously slowed down retail trade and lowered consumer confidence. The Federal Government must act quickly to ensure that retail trade does not suffer as we gear up toward the Spring Summer racing season and as retailers start looking towards stocking up for Christmas.

“According to the Australian Retail Index (delivered by BDO and Retail Express), retail sales for the month of June are very patchy and this would indicate that consumers have not returned to their former spending patterns from before the budget. This does not auger well for the next few months.

“With the added on costs that retailers have taken a hit on in July, (Minimum  wage increase the last transition of the Modern award for penalty rates, and 20 year olds being paid as adults after six months employment) retailers will need to review their costs such as labour and look to reducing costs wherever possible.

“Turnover fell in Victoria (-1.1%), followed by New South Wales (-0.5%), Western Australia (-0.3%), Queensland (-0.1%), the Australian Capital Territory (-0.3%) and Tasmania (-0.2%). These falls were partially offset by rises in South Australia (0.2%) and the Northern Territory (0.4%).

“After this week’s interest rates remaining stagnant, it is clear that the Reserve Bank of Australia (RBA)  must  assist and stimulate the economy by reducing interest rates at its meeting in August as slow retail trade being endured by retailers is doing little to assist retailers making a profit and the SME sector will feel this the most.

MONTHLY RETAIL GROWTH (April 2014 – May 2014 seasonally adjusted)

Cafes, restaurants and takeaway food services (0.1%), Food retailing (0.1%), Other retailing (-0.4%), Household goods retailing (-0.9%), Clothing, footwear and personal accessory retailing (-2.3%) and Department stores (-2.6%).  Total sales (-0.5%).

New South Wales (-0.5%), Northern Territory (0.4%), South Australia (0.2%), Queensland (-0.1%), Tasmania (-0.2), Western Australia (-0.3%), Australian Capital Territory (-0.3%) and Victoria (-1.1%), and Total sales (-0.5%).

YEAR-ON-YEAR RETAIL GROWTH (May 2013 – May 2014 seasonally adjusted)

Cafes, restaurants and takeaway food services (11.6%), , Food retailing (5.2%), Household goods retailing (3.8%), Clothing, footwear and personal accessory retailing (2.7%), Other retailing (1.5%) and Department stores (-1.9%). Total sales (4.6%).

Tasmania (8.7%), New South Wales (7.3%), Victoria (5.4%), Queensland (3.4%), South Australia (2.5%), Western Australia (-0.7%), Australian Capital Territory (-0.8%) and Northern Territory (7.4%). Total sales (4.6%).

Since 1903, the Australian Retailers Association (ARA) has been the peak industry body representing Australia’s $265 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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