Retail confidence, sales results high in lead up to Christmas

A new report released by the Australian Bureau of Statistics has indicated a positive spending trend ahead of the all-important Christmas trading period.

Sales in the retail sector reported a steady increase during October, up by 0.3 per cent seasonally adjusted, as opposed to the slow retail growth result of 0.1 per cent in September.

The third consecutive month of growth marks a significant step forward for retail this year, achieving a 3.56 per cent total year-on-year increase.

Russell Zimmerman, executive director of the Australian Retailers Association said the October results were an early indication of a busy Christmas period.

“Retailers across the country can expect to see an uptick in sales, with consumers rushing through stores to finalise their purchases and set their tables in preparation for Christmas,” Zimmerman said.

According to the ABS report, clothing, footwear and personal accessory retailing saw the strongest growth, reporting a sales increase of 2.6 per cent in the lead up to Christmas.

“With the warm weather ramping up, we have noticed a considerable increase in the apparel category with shoppers purchasing fashion and accessories to wear for the warmer months ahead,” Zimmerman said.

Other strong performers included household goods, up 0.6 per cent, ‘other retailing’ up 0.5 per cent, department store sales up 0.4 per cent and food retailing up 0.2 per cent.

The caf_, restaurant and takeaway food industries did not fare quite as well in October however, suffering a fall of 0.9 per cent for the period.

“Although the food category noticed stagnated growth throughout the October trading period, we can expect this category to see a resurgence in growth, with the festive season being the opportune time to consumers to purchase from food specialty retailers,” Zimmerman said.

For Australian retailers, the strong sales performance boosts confidence leading into the sector’s busiest period, indicating a return to consumer confidence.

Lindsay Carroll, deputy CEO, National Retail Association (NRA) said while the sales increase was an encouraging sign of things to come, retailers are still feeling the pressure to outperform in the latter parts of 2018.

“Retail business owners rely very heavily on the pre-Christmas and Boxing Day sales periods to sustain them during the quieter parts of the year,” Carroll said. 

“So although we would ideally like to see monthly increases of 0.4 or even 0.5 per cent, we welcome the fact that these numbers are trending in the right direction as we head towards Christmas.”

Carroll also went on to say that increased retail performance was a sign of positive economic development, particularly over the end of year period.

“This is also the time when the retail sector is able to create additional jobs or provide more hours to existing workers.  That can only happen if the cash registers are ringing in the leadup to Christmas,” Carroll said.

State by state results indicated that Queensland and the ACT were the strongest performing areas over the period, each seeing a rise of 1.1 per cent respectively.

Victoria, Western Australia and the Northern Territory all experienced growth of 0.6 per cent, with South Australia and Tasmania reporting similar increases.

New South Wales however, was the only state to report a fall in turnover for the October period, down by 0.4 per cent.