Retail Sales Perk Up As Department Stores Rebound
Signs of life at the nation’s cash registers with a better than forecast rise in retail sales in May on top of a higher revised performance in April.
Thanks to a rebound by the weak department store sector (especially Myer, Target and David Jones) and higher sales of clothing as more normal seasonal conditions returned in May, retail sales rose a seasonally adjusted 0.4% in the month against the revised 0.5% rise in April (0.4% previously).
The markets had been expecting a 0.3% rise retail sales. Sales rose in most states, according to the monthly report from the Australian Bureau of Statistics.
"Department stores (3.9 per cent) led the rises," said Ben James, Director of Quarterly Economy Wide Surveys. "There was also a strong result in clothing, footwear and personal accessories, which rose 2.2 per cent. Both industries were able to rebound after unusually warm weather impacted April sales.”
Clothing sales jumped 2.2% from April and department stores saw a 3.9% bounce.
There were also rises in food (0.3%) and household goods (0.1%). Cafes, restaurants and takeaways led the falls (-1.0%), whilst other retailing also fell (-0.1%).
In seasonally adjusted terms, there were rises in NSW of half a per cent, Queensland (0.4%), South Australia (1.1%), Victoria (0.2%), Tasmania (1.5%), and the Northern Territory (0.4%).
Western Australia, on the other hand fell (-0.5%) in seasonally adjusted terms, whilst sales in the Australian Capital Territory was relatively unchanged.
The Australian Bureau of Statistics said the trend estimate for Australian retail turnover rose 0.3% in May following a similar rise in April. Compared to May 2017, the trend estimate rose 2.8%.
Online retail turnover contributed 5.6% to total retail turnover in original terms in May 2018, a rise from 5.4% in April and 3.9% in May 2017.
Based on the original retail sales figures in the ABS report online sales in May were around $1.45 billion, up more than 40% from the May, 2017 figure of $980 million. That is a significant increase.
Meanwhile industry figures showed a slowing in car sales in June, which is usually the most active month of the year with car dealers and their suppliers engaging heavy sales clearances based on the end of the financial year.
The Federated Chamber of Automotive Industries (FCAI) said just over 130,200 units were sold in June, down 2.9% from a record 134,171 in June 2017.
The three top-selling vehicles during June were light commercial vehicles, with the Toyota Hilux leading the market ahead of the Ford Ranger and the Mitsubishi Triton third. Those vehicles were in end of financial sales campaigns aimed at tradies (tax).
The year-to-date 2018 results show the total vehicle market are running at 1% higher than the first six months of 2017 after being down in the opening months of this year.
The country’s biggest listed car dealer, Automotive Holdings Group (AHG) though has already issued a sales and profit warning for the year to June. That will impact AP Eagers (which has said nothing) because it now has a 25% stake in AHG.
Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.
At the AFR he was a finance writer, Finance Editor, News Editor and Chief of Staff. At the Nine Network he was supervising producer of Business Sunday for more than 16 years. He has also written for other online and analogue print publications here and overseas.