Business

A compromised Christmas for retailers last December

Tuesday 6 February 2018: The Australian Retailers Association (ARA) said December 2017 trade figures released today by the Australian Bureau of Statistics (ABS) represent a conservative Christmas instead of the merry Christmas retailers had in mind, with a 2.49% total growth year-on-year.

Russell Zimmerman, Executive Director of the ARA, said although the ARA and Roy Morgan predicted a 2.8% increase in pre-Christmas sales, from November 15 to December 24, 2017, these figures are not too far off the mark.

“Every year the ARA and Roy Morgan work together to produce the only professionally industry researched Christmas predictions in Australia, and we believe the figures released today are in the ball-park,” Mr Zimmerman said.

“As our predictions are based over a six-week period, the ARA and Roy Morgan will be analysing the November and December trade figures together to determine the actual pre-Christmas sales result.”

Although Cafés, Restaurants and Takeaway Food represented the highest year-on-year growth with a 3.85% increase, this category has slowed down from November, as more Australians spent time with family and friends indoors over the Christmas holidays.

“Online retail has also slowed down in December representing a 1.25% increase as many consumers might have been concerned about delivery timings so close to Christmas,” Mr Zimmerman said.

“The most concerning category of them all was Clothing Footwear & Personal Accessories as this category represented a shockingly low 0.39% year-on-year growth, with international fashion retailers increasing their Australian presence.”

The ARA also saw Department stores suffer a -0.30% sales decline, led by weakness in clothing, footwear and apparel sales.

“This low growth isn’t being helped by the constant and unsustainable rent increases from landlords, especially where sales growth is running below inflation,” Mr Zimmerman said.

Across the country, Victoria (4.46%), South Australia (4.34%) and New South Wales (2.74%) showed the strongest year-on-year growth of all the states. While both Tasmania (1.99%), the Australian Capital Territory (1.25%) and Queensland (1.05%) remained steady. Unfortunately, Western Australia (-0.49%) and the Northern Territory (-1.74%) received negative figures in December.

“The shining light over the festive season was that consumers celebrated the holidays with family and friends – this was illustrated by the strong growth in liquor sales with an outstanding 6.08% year-on-year increase,” Mr Zimmerman said.

“Although these figures are more conservative than retailers would have liked, we are hopeful that the improving economy will spur growth for retailers across the country in 2018.”

The volatility in the Australian retail sector signals the importance of strong, accurate leadership. The ARA is the only retail association constantly working to move retail forward. To view the ARA and Roy Morgan’s Annual Pre-Christmas Sales Predictions for 2017 please click here.

Monthly Retail Growth (November 2017– December 2017 seasonally adjusted)

Food retailing (0.72%), Clothing, footwear and personal accessory retailing (-0.08%), Cafés, restaurants and takeaway food services (-0.12%), Department stores (-0.64%), Other retailing (-1.79%), and Household goods retailing (-2.58%).

Queensland (-0.04%), South Australia (-0.31%), New South Wales (-0.39%), Northern Territory (-0.65%), Victoria (-0.75%), Western Australia (-0.81%), Australian Capital Territory (-1.51%), and Tasmania (-1.59%).

Total sales (-0.49%).

Year-on-Year Retail Growth (December 2016 – December 2017 seasonally adjusted)

Cafes, restaurants and takeaway food services (3.85%), Household goods retailing (2.98%), Food retailing (2.85%), Other retailing (1.90%), Clothing, footwear and personal accessory retailing (0.39%) and Department stores (-0.30%).

Victoria (4.46%), South Australia (4.34%), New South Wales (2.74%), Tasmania (1.99%), Australian Capital Territory (1.25%), Queensland (1.05%), Western Australia (-0.49%) and Northern Territory (-1.74%).

Total sales (2.49%).