X

Bricks and mortar continue to face challenges, as monthly sales up just 0.5%.

The latest ABS Retail Trade figures show that Australian retail sales rose 0.5 per cent in December to just over $22.5 billion.

This follows a 0.7% rise in November. 

However, year-on-year retail sales rose 5.7%. 

The Dec retail report came in a touch softer than expected, says Matthew Hassan, Westpac Senior Economist.

It signals the
recovery in retail sales evident in Aug-Nov extending …but “does
not show an acceleration in 
spending momentum which remains solid rather than spectacular.”

The 0.5% gain in monthly sales was in line with the consensus forecast, but
the 0.9% gain in quarterly volumes was below expectations of a 1.1%  rise.

Figures from NAB released this week show Internet sales boomed in December, climbing 12.6% last month, worth over $1.27 bn. Xbox One games, toys, food and booze are the most popular goods bought online. 

Internet sales, valued at $14.7bn last year, now accounts for 6.5% of traditional bricks and mortar retail, which looks set to rise to 10%, NAB economist Alan Oster told CN. 

But the latest retail figures is a positive sign for the industry following previous weak holiday sales, and there’s higher expectations for the January post-Christmas sales, says Australian Retailers Association, Executive Director, Russell Zimmerman.

Department stores like Myer and Target rose just marginally last month, up 0.3%, while in ‘other’ retailing fell 3%, and household goods retailing was down 0.2%. Within this subgroup, electronic sales fell -0.3%. 

The seasonally adjusted estimate fell for electronic goods also fell by under 2%. 

Food retailing was the big winner, up 2.5%, according to the ABS. 
There have been reports that the post-Christmas sales period was extremely successful, fuelled largely by booming Boxing Day sales.
 
“A number of retailers I have spoken to since Christmas have been blown away by how enormous Boxing Day was and we expect this will be evident in January’s retail trade figures,” said Zimmerman. 

Turnover rose in NSW (+0.9) the single largest rise, Victoria (0.6+), Queensland (0.2+), Tasmania (1.8+), the A CT (1.3+). 

Western Australia retail was up just 0.1%, while NT and SA suffered negative growth. 
However, some retail categories remain on a slow growth path and called for the need to fix the GST tax inequality caused by overseas, warned Zimmermann.  
 
“It is essential that the government finally makes a decision to close the low value GST loophole. Australian retailers have been competing at a disadvantage for too long, and it is only fair that the closing of the GST loophole is made a priority.”
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