Glimmer of hope for retailers but rate cut still needed to save Christmas- October ABS retail trade figures out TODAY

Peak retail industry body the Australian Retailers Association (ARA) said the monthly boost of 0.2 percent  as well as the 3.4 percent overall year on year growth reported in today’s ABS October trade figures would give retailers a reason to be optimistic but a rate cut was still necessary to save Christmas.

ARA Executive Director Russell Zimmerman said October retail growth would have given retailers a glimmer of hope but there are still key industry categories in decline, disguised heavily by high growth in food retailing.

“It was great to see a monthly boost for fashion retailers (1.2%) due to people spending for the spring racing carnival and other spring events. However, the monthly boost doesn’t put clothing retailers in the clear as they struggle with sales still 2.2 percent below last year. Department stores sales are also down at 3.3 percent below last October.

“Many categories are in decline from last year and overall growth (3.4%) is being boosted by food retailing (up 4.9%)  and cafes, restaurants and takeaways (4.1%) as well as being still well below the rate of inflation. The growth in household goods (2.6%), evidence of consumers staying at home rather than spending, is also below inflation.

“We can say with confidence today’s result will lift our Christmas expectations slightly. However, a December interest rate cut is still needed to boost spending confidence in the lead up to Christmas and ensure some Christmas cheer for retailers.

“We know that 54 percent of retailers are already going down the path of putting goods on sale before Christmas in order to entice customers into the store and 65 percent of retailers expect sales to be ‘not as high as last year’.

“We also know 65 percent of retailers agree that a December interest rate cut will boost sales, with 70 percent citing consumer mortgage stress as a reason for poor sales over the last eighteen months,” Zimmerman said.

MONTHLY RETAIL GROWTH (September  2011 – October  2011) Household goods retailing (0.2%), Food retailing (0.5%), Cafes, restaurants and takeaway food services (0.2%), Other retailing (-0.4%), Department stores (-0.7%) and Clothing, footwear and personal accessory retailing (1.2%). Total sales (0.2%)

Western Australia (1.6%), Victoria (0.6%), South Australia (0.2%) and the NorthernTerritory (0.7%), Queensland (-0.3%), Tasmania (-1.2%), New South Wales (-0.1%) and the Australian Capital Territory
(-0.7%)

YEAR-ON-YEAR RETAIL GROWTH (October  2010-  October  2011) Clothing, footwear & personal accessory retailing (-2.2%), department stores (-3.3%), cafes, restaurants & takeaways (4.1%), other retailing (6%), food retailing (4.9%) and household goods retailing (2.6%), Total sales (3.4%).

New South Wales (2.1%), Queensland (3.7%), Western Australia (10%), Victoria (3.2%), South Australia (0.2%), Tasmania (-0.3%), Australian Capital Territory (0.1%), Northern Territory (7.5%).

For over 100 years, the Australian Retailers Association (ARA) has been the peak industry body in Australia’s $240 billion retail sector which employs over 1.2 million people. Visit www.retail.org.au or call 1300 368 041.

-ends- For interview opportunities with ARA Executive Director Russell Zimmerman
contact: Andie McMaster, Media and Communication Officer T: 0408 613 178 E: media@retail.org.au

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