March retail figures slump as department stores and household goods are the biggest losers.The Australian Retailers Association said the ABS’s trading figures March, which showed a 0.5 percent decline compared to the previous months, was down to cautious consumer spending in light of flood threats and looming carbon tax.
“Dismal sales across all retail categories as the threat of flood levies and the carbon tax kept consumers’ wallets shut,” said ARA Executive Director Russell.
This is in line with recent market outlooks by the likes of Harvey Norman who has cited poor weather and the strong
Australian dollar as mitigating factors in its battle to increase profit margins.
And department stores were the biggest losers although sales were poor across the board, Zimmerman admitted.
Department stores (-3.0 percent), food (-0.4 percent) and household goods retailing (-0.3% percent) all showed drops.
And these latest trading figures, released by the Australian Bureau of Statistics, bucked previous upward trends in retail which witnessed a 0.3 per cent jump in January and 0.8 per cent for February.
However,the retail boss warned any new taxes introduced by Treasurer Wayne Swan in next Tuesday’s Federal budget would bring a further drop in retail.
“Disappointing March retail trade is a sure sign to the Government that household discretionary spend is tighter than ever and consumers will react to any new taxes announced in Tuesday’s Budget by further tightening their purse strings.
“The Government must make sure any attempt to reduce debt in the Budget is done by cutting back on Government spending, not by taking more cash away from consumers with new and increased taxes.
And what is more worrying is analysts are now suggesting the decline may point to an overall slump in the economy.
“Today’s weak data – while likely overstating the extent of weakness across the broader consumer sector, and the floods remain a point of uncertainty – reinforce a now likely negative first quarter GDP print,” said UBS chief economist Scott Haslem.
Queensland showed the biggest monthly retail decline in sales of any state with a 2.9 percent fall, followed by New South Wales (-0.1 percent), Tasmania (-1.4 percent) and the Australian Capital Territory (-0.3 percent).
Victoria bucked the trend showing a 0.9 per cent rise in sales as did South Australia and the Northern Territory.
“Year-on-year growth for March is also well below the current rate of inflation at 2.2 percent and is yet another blow to the sector that has been struggling with poor trading conditions for over 18 months,” he added.