Although data from the Australian Bureau of Statistics shows an annual retail sales growth of 2.66 per cent in December, the Australian Retailers Association said the rate is “disappointing”, especially following what looked like a resurgence in November.
The executive director of the ARA, Russell Zimmerman, opined that the ABS figures have stalled any resurgence in consumer confidence shown by the November lift driven by Click Frenzy, Black Friday and Singles Day.
He explained that bushfires in many parts of Australia and the ongoing drought have exacerbated any December hangover in the aftermath of a relatively successful November.
“These numbers from the ABS, showing a slowdown in year-on-year retail sales growth in December to 2.66 per cent, are pedestrian to say the least, but while we’re disappointed, they’re hardly unexpected,” Mr Zimmerman opined.
“We were excited by November, but we warned bushfires and drought would compound any effects of December sales being pulled forward by events such as Click Frenzy, which is almost certainly the case here.”
According to data from the ABS, retail sales fell month-on-month in several categories including department stores, (-2.8 per cent); cafés, restaurants and takeaway food services (-0.9 of a percentage point); clothing, footwear and personal accessory retailing (-1.5 per cent); food retailing (-0.3 of a percentage point); and household goods retailing (-0.3 of a percentage point).
In seasonally adjusted terms, there were monthly falls in New South Wales (-1.2 per cent), Queensland (-0.5 of a percentage point), South Australia (-1.3 per cent), the Northern Territory (-0.4 of a percentage point) and the Australian Capital Territory (-0.1 of a percentage point).
Mr Zimmerman said the ARA remained deeply concerned by the impact of bushfires in rural and regional areas.
“If there’s a hope amid this summer’s natural disasters, it’s that it’s finally raining across many of the worst-impacted parts of the country. While not drought-breaking, Queensland, NSW and Victoria have had good recent rains, which we hope will both mitigate the ongoing bushfire risk and bring drought relief,” Mr Zimmerman said.
He noted that despite the disappointing numbers, January’s retail turnover figures were also likely to have been impacted by the natural disasters the summer has brought when they are released next month.
2020 outlook hopeful
Mr Zimmerman, however, emphasised that while the December numbers underlined concerns of a quiet Christmas for retailers, the outlook for the remainder of 2020 wasn’t necessarily pessimistic.
“When we saw the November numbers, we thought that Click Frenzy, Singles Day and Black Friday might have pulled some sales forward, but we also felt the result signalled a tentative return of consumer spending, and we still think that might resume once the impact of natural disaster washes out of the cycle,” he said.
Mr Zimmerman concluded: “It’s difficult to draw too many conclusions from the December results because of the strength and number of extraordinary factors at work during that period, but we remain optimistic the retail sector is poised to bounce back strongly in 2020 as we have suggested for some time now.”