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Retail figures reveal extent of high street struggle

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Retail figures reveal extent of high street struggle

Street in Australia

The latest retail turnover figures from the ABS paint a bleak picture for bricks and mortar retailers, with online sales contributing the highest transaction volumes ever recorded.

Covering November 2018, which included the Black Friday sales, the ABS said that retail turnover surged by 0.4 of a percentage point for the month, increasing on the 0.3 of a percentage point rise recorded in October.

Online sales reached their highest level ever recorded in the ABS series, accounting for 6.6 per cent of total retail turnover.

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While still not a large proportion of overall retail sales, that was a big jump from the 5.5 per cent contribution that online sales made in the same month just a year earlier.

It came just a day after news broke that beauty and homewares retailer Crabtree & Evelyn is in the process of closing down its Australian stores, the latest in a string of retailers to succumb to soaring costs and difficult trading conditions.

Pre-Christmas cheer for some retailers

Some retailers bucked the trend and recorded notable increases in sales over the month. Cream of the crop were retailers selling clothing, footwear and personal accessories, which saw sales rise by 1.5 per cent in November. Retailers selling household goods also enjoyed a 1.2 per cent rise in sales.

Meanwhile, department stores posted a 0.4 of a percentage point rise and food retailing edged up by 0.2 of a percentage point.

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Other retailing and the hospitality sector both struggled in the month, with sales in the other category as well as the café, restaurant and takeaway sector both seeing sales dip by 0.1 of a percentage point.

Retail turnover, property prices take divergent paths

There has been mounting concern in recent months that falling property prices, led by steep falls in Sydney and Melbourne, would see households cut back on their spending.

However, the ABS figures pour cold water on any direct connection between property values and retail sales, at least for the month of November.

NSW saw the second highest rate of seasonally adjusted growth in retail sales in November at 0.8 of a percentage point (behind the ACT’s 1.6 per cent rise).

Western Australia, despite its struggling property market, also posted solid growth, with retail turnover rising by 0.6 of a percentage point.

Conversely, the booming Tasmanian economy actually saw retail turnover fall by 0.2 of a percentage point.

Among the other states and territories, Queensland posted growth of 0.4 of a percentage point, Victoria and South Australia were relatively flat (up by 0.1 of a percentage point and unchanged, respectively). In the Northern Territory, turnover slumped by 0.9 of a percentage point.

All eyes will be on the all-important December retail figures, likely to be released in February, to deliver a real snapshot on the state of the retail industry and consumer spending.

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