Written on the 7 February 2017 by Business News Australia

THE FIRESALE that marked the closure of the Masters brand has been blamed for pulling down retail trade figures for December.

Retail turnover declined 0.1 per cent in December 2016 to $25.6 billion (seasonally adjusted) compared to November according to the latest Australian Bureau of Statistics retail trade report. Year on year, growth was around 3 per cent.

Household goods retailing suffered the biggest fall with a 2.3 per cent drop in turnover during December with the hardware, building and garden supplies retailing industry subgroup down by 6.6 per cent compared to the previous month.

The Australian Retailers Association (ARA) says the Masters closure took its toll on the hardware category (1.76% year-on-year) down from 10.15% in November 2016 figures.

"We have seen an expected decrease in hardware figures temporarily, but now with reduced discounting and strong home price growth we can expect positive figures moving forward," says ARA executive director Russell Zimmerman.

Food retailing (0.5 per cent), clothing footwear and personal accessory retailing (1.4 per cent), cafes restaurants and takeaway food services (0.2 per cent), and department stores (0.3 per cent) found growth during the month.

The Australian Retailers Association and Roy Morgans predicted consumers would spend $48.1 billion in the Christmas period between 15 November and 24 December and Zimmerman remains hopeful that the prediction will be met when the numbers are finalised.

Although December 2016 sales showed no increase over November 2016 trade figures, Zimmerman says the industry's annual Christmas performance remains stable and the uplift in discretionary spend is exactly what the industry would expect.

Zimmerman, says this steady growth compliments the 3% year-on year growth in November 2016 as many families across Australia started purchasing their Christmas gifts early.

Several categories saw a significant surge in turnover during the Christmas period. Clothing, footwear and personal accessory retailing lead the categories growing at 7.32% year-on-year, followed closely by pharmaceutical, cosmetic and toiletry goods (5.33% year-on-year).

"Even newspaper and book retailing has shown a positive uplift from -6% during November 2016 trading, to an optimistic 0.91% growth due to many shoppers filling their Christmas stockings with popular book titles last year", says Zimmerman.

"We've seen a slight decrease in takeaway food services, which usually demonstrates strong growth, though we've also seen cafés and restaurants up 2.4% as more shoppers spent their holidays out and about enjoying their time with families and friends."

Though Department Store figures are still negative (-2.94% year-on-year), they are showing signs of marginal improvement. The category is making a gradual recovery from a downturn attributed to the recent restructure of several prominent department store retailers.

The states showing a healthy year-on-year growth include Tasmania (4.40%), South Australia (3.92%), New South Wales (3.37%) and Queensland (3.42%). While Victoria (2.96%), Australian Capital Territory (2.83%), Northern Territory (1.49%) and Western Australia (0.85%) aren't leading the pack, they still demonstrated a positive growth over the December trading period.

In terms of online spend for December, the NAB Online Retail Sales Index indicates that e-commerce sales increased 10.4% year-on-year, with takeaway food and taking the lion's share of growth on a category basis at 5.5% year-on-year.

"With online retail making up 7 per cent of all retail sales, it's double digit growth year-on-year is not surprising as e-commerce retailing is a key contributor to the retail industry as a whole," says Zimmerman.

Business News Australia
Author: Business News Australia





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