Spending continues upward trend in July
The increase boosted Australian retail sales turnover for July to $24.3 billion, and follows on from growth of 4.9 per cent in June year on year. In monthly sales terms, July 2015 retail sales fell 0.1 per cent compared to June 2015.
Russell Zimmerman, executive director of the Australian Retailers Association (ARA), said the month on month decline of 0.1 percent fails to tell the whole story, with this figure reflective of annual mid-year sales activity which has typically all but wrapped up by July.
“Year on year figures provide the most accurate measure of the sector’s performance and are the most used figures by retail businesses in their own reporting,” Zimmerman said.
“Annual retail sales growth has continued its solid upwards trajectory, a fantastic result for the Australian economy, which has been plagued by suggestions in the media of a possible downturn.
“These retail figures indicate that despite what may be occurring elsewhere in the economy, the Australian retail industry is robust and in a favourable position. We expect retail, as the largest employment sector in Australia to continue to support the economy with positive growth,” said Zimmerman.
The largest growth was seen in clothing and footwear and household goods, with increases of 8.8 per cent and 8.5 per cent respectively; followed by café restaurants, and takeaway foods, four per cent; food, 2.8 per cent; other retailing 2.5 per cent; and department stores, 1.8 per cent.
By state, NSW reported the highest growth, with 5.2 per cent; followed by Australian Capital Territory, 4.9 per cent; South Australia, 4.4 per cent; Victoria, 4.6 per cent; Queensland, 3.2 per cent; Western Australia; 2.9 per cent; Tasmania, 2.3 per cent; and Northern Territory, 2.2 per cent.
The National Retail Association (NRA) said the latest retail trade figures show clear need for economic reform.
Trevor Evans, CEO of NRA, said the July figures, which showed a 0.2 per cent increase in trend terms but a 0.1 per cent fall seasonally adjusted, showed the steady growth in retail of the past two years may be waning.
“Today’s figures reflect the results for the overall economy released yesterday, which show that Australia is still growing but not as strongly as it could be,” Evans said.
“This clearly points to the need for urgent reform across the economy – in taxation, in government spending, workplace relations, and in productivity measures.
“We can no longer sit on our hands and just hope for a continuation of the strong economic performance that Australians have become used to in recent decades.”
Evans said the 0.1 per cent fall in seasonally adjusted spending was not surprising, given the very strong rise of 0.6 per cent in June.
“Previous figures have shown that the stimulus measures in the Federal Budget clearly had a significant impact on spending in May and June,” Evans said.
“It’s to be expected that some spending would have been brought forward into June to take advantage of the tax breaks. The figures will hopefully return to normal in coming months.
“But that doesn’t mean that we can afford to do nothing on the economic reform front.
“Today’s numbers are a very clear warning that the good times won’t last forever, and we need to act now.”
The story first appeared on Inside FMCG’s sister site, Inside Retail.