On the one hand, retail sales for June were weak, rising from May by just 0.2%, seasonally adjusted.
Looking at the components, there was evidence to suggest that discounting was intense, indicating there could have been a bigger rise in more confident conditions.
But that’s a big if with most of the small rise and the improvement in the next year coming from cafes, coffee shops, takeaways and restaurant.
The 0.2% rise in June followed a 0.2% increase in May and 0.6% in April.
Department stores returned to growth, despite strong discounting in all sectors.
Sales for the year to June were up 3.2% in trend terms, according to ABS figures, but most of that came from a 10.6% jump in sales of cafes, coffee shops, takeaways and restaurants.
Sales for the June quarter were up 0.8%, seasonally adjusted though, which was a bit more than expected.
The ABS said that clothing, footwear and other personal accessory retailing sales were up 2.8%; household goods retailing (up 2.4%). cafes, restaurants and takeaway food (up 0.8%) and food retailing (0.1%) were also higher in seasonally adjusted volume terms.
"Department stores (-1.4%) and other retailing (-0.6%) decreased in seasonally adjusted volume terms," The ABS said.
Quarterly seasonally adjusted retail sales grew in Victoria (up 2.0%), South Australia (1.6%), Northern Territory (1.3%), Queensland (0.5%) and NSW (0.4%).
But sales fell in seasonally adjusted volume terms in Western Australia (by 0.8), Tasmania (0.5) and Australian Capital Territory (0.1%) in the quarter.
(The ABS warned that there may be some revision once the impact of the rise in tobacco prices after the excise hike in May is further assessed.)
Looking at what rose and fell in the month of June tells us a bit more about the underlying strength of retail sales.
The likes of Premier and Just Group, Woolworths, Coles and other groups have all said making sales without discounting was tough going in June.
Still, the ABS said Household goods retailing recorded the largest seasonally adjusted increase in the month of June of 1.3%, followed by department stores (0.6%), cafes, restaurants & takeaway food services (also 0.6%) and other retailing (0.3%).
But reflecting the sluggish nature of some sectors, the ABS said sales in clothing, footwear and other personal accessory retailing fell 1.2% after strong rises in May.
Retailing recorded a small fall of 0.3%, but Woolies and Coles have both remarked upon the way that food price inflation fell in the June quarter, driven by lower prices for fruit and vegetables (which emerged in last week’s Consumer Price Index).
Some commentators said the sluggish sales reflect the six interest rate rises since last October and there’s probably some truth in that (especially with building approvals and housing finance weaker), meaning furnishings, whitegoods and other product sales are slowing.
But the sharp rise in car sales seen since February belies the explanation that it is all down to rising interest rates.
As well, unlike the US, car sales and petrol are excluded from our retail sales.
Car sales are booming in Australia, while petrol sales are showing more modest rises.
But if they and the rest of the auto sector were included, it would produce a very different look in the overall performance.
According to figures from the Federated Chamber of Automotive Industries, car sales were up 16.7% in the first half of 2010, compared with the same period of 2009 (which was depressed).
The absence of any impact from the stimulus payments from a year ago looks like a more realistic explanation, with falls in clothing footwear and personal accessory retailing probably confirming that.
In trend terms, state by state, Victoria’s retail sales rose 0.5% in June, while NSW saw a rise of 0.2%.
Western Australian sales fell 0.1%, falling for a second month, while in Queensland they rose 0.1%.
South Australia’s retail sales rose 0.5% and Tasmania’s and the Australian Capital Territory’s were flat in the month, according to the ABS.
Looking at the 12 months to June, only one sector stood out, cafes, restaurants and takeaway food services.
Sales in this sector jumped 10%, or $237 million, the biggest of any of the groups surveyed, from $2.37 billion in June 2009, to $2.61 billion in June of this year.
The next best was food retailing which rose $139 million to $8.03 billion, seasonally adjusted.
Household goods sales were lower in June of this year than a year ago, while other retailing, department stores and clothing and footwear showed marginal rises.
In original terms, sales for the six months to June are only up just on 2% from the same period of 2009 (in original terms).
There is some evidence that consumers have curtailed discretionary spending.
They have to a degree, with the spend a in the cafes and takeaway sector easing from an annual rate of more than 13% earlier this year to 10% in the 12 months to June.
But spending on coffee, eating out and takeaways is discretionary, so it would seem that there has been some caution, but not enough so that a good night out or an extra coffee is no longer on the daily or weekly agenda.
