A Slow July Points to Disappointing Retail Turnover in the Months Ahead

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By Published On: September 5, 20180 Comments

Retail trade figures just released by the ABS reveal a flatline in July 2018, which the National Retail Association predicts will continue into the holiday period ahead.

Numbers released this week by the Australian Bureau of Statistics (ABS) report a 0.0 percent change in retail turnover for the month of July, with a decline in three of the six industries. Online retail turnover was also down, accounting for 5.5 percent of total turnover – down from 5.7 percent in June. This is, however, up from July 2017, when online retail made up only 4.3 percent.

The National Retail Association (NRA) warns retailers that this flatline will probably continue despite the approaching holiday season, usually a time of surging sales. “Within the next six months there are state elections in both Victoria and New South Wales, not to mention a federal poll also taking place between now and May 2019,” NRA CEO Dominique Lamb explained in a press release following the announcement of the ABS data. “We know people spend less during election periods due to the uncertainty, so we can’t get complacent with the Christmas trade period just around the corner.”

The ABS reported a 0.0 percent change in retail turnover for the month of July. Compare this to the 0.4 per cent rise in June 2018, as well as the profitable months preceding. “Retail had enjoyed three consecutive months of growth, so it is very disappointing to see the figures flatline for July,” said Lamb. “Consumer confidence is a little fragile at present, so the NRA would urge the RBA to keep interest rates low for the time being.”

Ben James, Director of Quarterly Economy Wide Surveys at the ABS, broke down the figures: “Household goods retailing (-1.2 per cent) led the falls, and there were also falls in Clothing, footwear and personal accessory retailing (-2.0 per cent) and Department stores (-1.9 per cent). The falls were offset by rises in Other retailing (1.7 per cent), Food (0.3 per cent) and Cafes, restaurants and takeaway food services (0.6 per cent).”

While these numbers suggest a plateau rather than a troubling decline, they do present an unpromising start to the new financial year. Nonetheless, although “the July figures released by the ABS are certainly very ordinary”, Lamb says, “there’s no need to hit the panic button just yet”.

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