JULY ABS RETAIL FIGURES “AN UNEXPECTEDLY SOBERING ECONOMIC SNAPSHOT”
The Executive Director of the Australian Retailers Association, Russell Zimmerman, said July retail trade figures from the Australian Bureau of Statistics showing annual growth of 2.36% were “an unexpectedly sobering economic snapshot” that underlined the ARA’s narrative about retail businesses facing tough trading conditions.
Noting month-on-month figures showing a fall in July of -0.13% after a 0.4% rise in June, Mr Zimmerman said these constituted a surprising, disappointing result that showed stimulatory economic measures were justified.
“With the ‘election effect’ well and truly over, and the Morrison government’s $1,080 tax rebates beginning to flow to consumers via tax refunds in July – coupled with two months of modest recovery in retail spending ahead of these numbers – we’re disappointed and surprised by these figures,” Mr Zimmerman said.
“They offer an unexpectedly sobering economic snapshot, and there’s no point trying to sugar coat it,” he added.
Mr Zimmerman reiterated, as he has said for several months, that retail trade was “patchy” and that sections of the retail industry were “doing it tough,” and that today’s figures proved it. Even so, he rejected suggestions of a so-called “retail recession” that some commentators had made in recent months.
“Two quarters of negative growth equals one recession, and one month of anaemic retail trade doesn’t meet that definition by any stretch,” Mr Zimmerman said.
“Even so, today’s numbers are a wake-up call: with tax cuts, interest rate cuts and minimum wage rises that took effect on 1 July, we know there’s more money in the economy than there was in June,” Mr Zimmerman said.
Mr Zimmerman said that if people were worried about the prospect of a recession, the best thing they could do was to get out and spend this money on products and services in retail businesses.
“I “get” that people might be concerned, but sensationalist or alarmist commentary doesn’t help,” he said.
“The best way to stave off a recession is to ensure economic activity continues to grow: and in the case of our industry, that means getting consumers to have to confidence to go out for dinner, to buy that new furniture piece for the house, or to buy the new suit or dress they’ve been window shopping for a while,” he added.
Mr Zimmerman said that with month-on-month retail trade falling 0.13% in July, something was wrong given the extra money pumping into the economy since 1 July.
“On the one hand, the government’s $1,080 tax rebates would only have started hitting bank accounts toward the middle of the month, and that – combined with the end of the financial year – may have impacted today’s numbers,” Mr Zimmerman said.
But on the other, just about everyone will have their tax refunds by the time we see the results for August, so I am still inclined to think the impact of all that extra money might yet remain to be seen,” he added.
Mr Zimmerman said year-on-year growth in July of 2.36% — coupled with improvements in WA and Tasmania, and ongoing strong rises in Queensland and Victoria – showed it was possible retail trade would rebound quickly.
“Even so, this is a surprising and disappointing result. I urge consumers to support local businesses, and spend those tax cuts, but also urge policymakers inside and adjacent to government to look at all stimulatory measures to help ensure retail, which is the largest private-sector, employer, bounces back and continues to function as the bedrock pillar of the Australian economy it always has been,” Mr Zimmerman concluded.
Monthly Retail Growth (June 2019 – July 2019, seasonally adjusted)
Food retailing (0.31%), Household goods retailing (0.24%), Department stores (-0.35%), Other retailing (-0.49%), Cafés, restaurants and takeaway food services (-0.73%), and Clothing, footwear and personal accessory retailing (-1.36%).
Western Australia (0.91%), Northern Territory (0.23%), Tasmania (-0.04%), Victoria (-0.14%), New South Wales (-0.18%), Queensland (-0.38%), South Australia (-0.71%), and Australian Capital Territory (-0.72%).
Overall month-on-month sales growth: -0.13%.
Year-on-Year Retail Growth (August 2018 – July 2019, seasonally adjusted)
Food retailing (3.21%), Clothing, footwear and personal accessory retailing (3.19%), Other retailing (2.46%), Cafés, restaurants and takeaway food services (2.16%), Department stores (0.62%) and Household goods retailing (0.59%).
Queensland (4.24%), Victoria (3.34%), Western Australia (3.03%), Australian Capital Territory (2.32%), Tasmania (2.20%), South Australia (1.74%), New South Wales (0.46%), and Northern Territory (-1.52%).
Overall year-on-year sales growth: 2.36%.
ENDS: to interview Mr Zimmerman, or for more details: Tim Janczuk (m) 0439 612 556 (e) firstname.lastname@example.org
About us: founded in 1903, the Australian Retailers Association is Australia’s largest retail association, representing a $320bn dollar sector employing more than 1.3m people. As Australia’s premier retail body, the ARA works to ensure retail success by informing, protecting, advocating, educating and saving money for its 7,800 independent and national retail members. To learn more, visit www.retail.org.au or call 1300 368 041.