A new retail index tracking weekly sales will give business owners the ability to better measure their performance and adapt to changing market conditions.
The new index was launched last week by accounting firm BDO and point-of-sale provider, Retail Express, and showed an 8.4 per cent rise in retail sales over the Easter break.
The index is based on data taken from 2,000 retailers and will compare sales against the previous week as well as providing year-ago comparisons going back to December 2012.
The ARI is based on 100 per cent of transactions, including cash, card and layby purchases. It measures the percentage change in sales week-by-week across four categories, including fashion and accessories, furniture and homewares, sporting and recreational goods and other general retail purchases.
Previously retailers had to rely on monthly retail sales figures released by the major financial institutions. These figures are based on credit card transactions which represent roughly 60 per cent of sales. Businesses can also use Australian Bureau of Statistics retail figures which can be up to two months old.
While the weekly sales index will remain freely accessible, a daily data update and a state-by-state breakdown will be provided to subscribers later this year. Sales will be divided into metropolitan and regional areas.
Business owner Godwin Hili established the first Godwin Charli fashion retail outlet seven years ago in Melbourne. Mr Hili, 33, now owns four stores specialising in men and women’s tailored fashion, from smart casual wear to the red carpet and employs about 15 people. He told Dynamic Business the new retail index would allow him to better gauge whether he was performing well or not.
“It’s always nice to know how you stack up against the rest of the market. You’d always like to know is there any more I could be doing? Have I reached my potential? It would be nice to know if we measure up from week to week. Are there others experiencing the same sort of retail experience?” he said.
“During spring racing season, those two months across October, November, you expect to be busy. And if you’re not you want to know why… Season to season it would be useful as well. If you’re having a considerably warm winter, is everyone else experiencing the same sort of downturn, or have we bought the wrong product this season?”
Chief executive of the National Retail Association, Trevor Evans, said the index would prove to be a useful resource for all retailers – including smaller operators. “So, all retailers keep an eye on the statistics and they benchmark their performance against their peers. And that’s a very useful mechanism for them to determine whether they are under-performing or over-performing in their category,” Mr Evans told Dynamic Business.
“If you are a boutique fashion accessories retailer in the city of Melbourne, I think you would be very interested to know whether your experience of Christmas… (was) typical of other retailers in your category or whether you were experiencing something very different.”
However, Mr Evans said that measuring and attributing online sales was important with online purchases accounting for about 7 per cent of total sales in Australia. In some retail categories, Mr Evans said online sales made up about 20 per cent of total sales
BDO national retail lead partner Simon Scalzo told Dynamic Business the index would be useful to business of all sizes, including smaller operations that did not have their own internal analysts. However, he said the index did not factor in online purchases.
“At the moment we’re not capturing online sales. It has a focus on bricks and mortar store sales,” he said. “We spoke to a lot of our retail clients as did Retail Express who we’ve partnered with this for this. They were crying out for more tools to put in their tool box and use to give them some sort of competitive advantage.”
