Retail figures released today show mixed results for the industry, with the rate of growth in retail sales increasing only slightly from November 2014 to December, however the Australian Retailers Association (ARA) is pleased with the annual rate of growth in 2014.
Retail trade figures for December 2014 show a 0.2 per cent increase in retail sales to $23.81 billion, which followed a 0.1 per cent rise in November 2014.
Department stores had a tough Christmas, down 0.9 per cent month-on-month and down 0.3 per cent year-on-year. The household goods category also saw a 0.4 per cent fall however within that category, electrical goods retailing enjoyed a 1.5 per cent rise.
Year-on-year retail growth rose 4.1 per cent seasonally adjusted, which the ARA is calling “a positive sign for the retail industry.”
Executive director Russell Zimmerman said the ARA had hoped December retail trade would see 6 per cent year-on-year growth but 4.1 per cent was still a great achievement for the industry.
“While most retail businesses enjoyed a steady month of sales in December, feedback from retailers is that there was a major post-Christmas sales surge which won’t be fully reflected in these December sales figures,”Zimmerman said.
This statement matches the sentiment displayed in JB Hi-Fi’s half year financial results, which reflected a subdued Christmas period, but positive growth in comparable sales figures in January 2015 put CEO Richard Murray in good spirits, with the company on track to meet its full year forecasts.
“Uncertainty in the build up to the Victorian, New South Wales and Queensland elections may have also had an impact on confidence in the lead up to Christmas, which is always the case with elections,” Zimmerman said.
On a monthly basis, the best performing industries were clothing, footwear and personal accessory retailing (up 2.7 per cent) and food retailing (up 0.3 per cent).
Roy Morgan Research will now examine both the November and December retail trade figures to determine if the $45 billion the ARA predicted would go through tills in the lead up to Christmas was achieved. The results should be made public in a few weeks the ARA said.
National Retail Association (NRA) chief executive Trevor Evans said the results suggest Australia is heading back in the right direction, but that the momentum is fragile.
“Today’s figures come right on the back of the Reserve Bank’s decision to cut the official interest rate, which, on the face of it, is all welcome news for retailers, and likely to put more money into the pockets of consumers in the coming months,” Evans said.
“At the same time, the RBA decision clearly indicates some nervousness about the ongoing strength of the economy. So in order to maintain consumer confidence we are calling on political leaders to put an end to the current speculation and ensure government gets on with the job of governing,” he said.
Mr Evans said the sector had enjoyed relatively consistent and modest growth throughout 2014, after previous years of economic weakness and political instability.
“Today’s figures, coupled with Tuesday’s rate cut, send a message to the Federal Government and the Opposition – yes, we are back on the right track but this could be undermined if a focus on essential policy settings is abandoned in order to deal with distracting party speculation and instability.
“Our leaders need to move quickly towards a ‘back to basics’ approach. It is time to get on with the job and allow businesses to move forward and to create employment and prosperity throughout the coming year,” he said.