Despite multiple months of positive retail trade figures this year, a key retail body is tipping that retail growth is likely to slow after the Australian Bureau of Statistics reported turnover fell by 0.2 percent in April.
Following a 1.1 percent rise in March 2012, the latest figure has been described as disappointing for retailers who were hoping for a slight boost over the Easter holiday period.
“The monthly decline shows consumers might have had more time up their sleeves in April but sadly no cash in their pockets,” Australian Retailers Association (ARA) executive director Russell Zimmerman said.
The largest contributors to the negative result were falls in department stores sales (-1.0 percent) as well as household goods retailing (-0.8 percent). The figures also revealed year-on-year declines across clothing and footwear (-1.5 percent), department stores (-3.1 percent) and household goods (-0.8 percent).
According to the Australian National Retailers Association, the fall indicates consumers are under financial stress and as a result, are reverting to a ‘save over spend’ mentality.
Victoria’s retail trade was hit hardest with a 1.6 percent decline, followed by the Northern Territory with a 0.9 percent decline. The only states to record meaningful rises were New South Wales (0.7 percent) and South Australia (0.5 percent).
Despite the monthly decrease, the ARA has calculated a 2.4 percent increase in sales compared to April last year. This was largely due to food-based retailing, which recorded the only rises in April. Cafes, restaurants and takeaway food services reported increases of 0.4 percent and food retailing reported an increase of 0.1 percent.
“Australians are spending on necessities and smaller goods while forfeiting larger purchases in the absence of discretionary dollars,” Zimmerman said.
While March recorded positive figures, the Australian National Retailers Association claims that it was a “blip in the numbers” rather than an indication of strengthened retail trade.
“The RBA’s decision to leave the cash rate unchanged for April coupled with banks raising interest rates showed little regard for the stress consumers are under and the pressure retailers are facing in getting people through their doors,” Zimmerman agreed.
According to Zimmerman, the ARA predicts that “retail figures will continue to show slow to zero growth over the next few months”.