Retail sales fell unexpectedly in June as consumers continued to watch every dollar amid jittery global economic conditions and worries about higher interest rates.
Figures from the Australian Bureau of Statistics showed retail sales fell by 0.1% in the month, despite economists predicting sales would rise by 0.4%.
It followed a 0.6% fall in May and a 1.0% rise in April (revised from 1.2% originally).
For the quarter retail sales rose 0.3%. For the year to June sales were up around 2.6%, the lowest annual rise in 50 years.
But don’t tell car buyers, car sales last month were down on a year ago, but up on a daily basis as purchases of locally-made cars jumped because of new models and better supply lines from Japan (see below).
Predictably the retail sales figures saw the Australian dollar sold off as investors viewed the latest weak retail figures as more reason for the Reserve Bank to hold off raising interest rates.
The dollar lost almost three-quarters of a US cent to drop as low of $US1.0679 in recent trading, bringing the total loss in the past day to three US cents. It later bounced back to around $US1.0735.
But the loss of confidence overseas and growing fears of a global economic slide, plus a surge in eurozone tensions were bigger factors: the US dollar has risen sharply against the euro and the yen in the same time.
The ABS said sales fell in June in department stores (-3.2%), household goods retailing (-0.7%) and cafes, restaurants and takeaway food services (-0.7%).
Turnover rose in other retailing (1.2%), food retailing (0.4%) and clothing, footwear and personal accessory retailing (0.2%).
Retail trade fell in the month, to a seasonally adjusted $20.54 billion, compared to a downwardly revised $20.567 billion in May, the ABS said.
The ABS said turnover fell in NSW (-0.5%), South Australia (-0.8%), Victoria (-0.1%) and the ACT (-0.7%). Tasmania (0.0%) was relatively unchanged. Turnover rose in Western Australia (0.5%), Queensland (0.2%) and the Northern Territory (0.6%).
The weak retail sales figures saw media shares at long-term lows.
Fairfax Media is the worst hit by the latest sell-off, hitting a low of 84.5c, almost half the stock’s value of a year ago and its lowest point in over two years.
News Corp shares fell to a low of $14.25.
Seven West Media, owner of the Seven Network and The West Australian newspaper, hit a low of $3.40, more than half their value at the corresponding point 12 months ago.
But if retailing remains sluggish and very weak in department stores and electrical discounters, look at car sales: they remain very solid and just under record levels.
Take the July figures from the Federated Chamber of Automotive Industries:
Cars retailed by dealers in the month were 80,991, down 1.7% from July of last year which had an extra selling day.
Taking that into account, daily care sales last month were up just over 2% on July of last year.
Name me one sector in retailing with that kind of experience this year (and car sales are retailing, and the Americans treat them as part of the retail sector).
SUVs were the main reason for the sales lift (so much for higher petrol prices), up 351 vehicles than in July 2010. Sales of passenger vehicles (down 4%) and light commercials (off 1.7% from a year ago) went backwards.
Year-to-date sales were 577,227 vehicles, down 36,317 units (or 5.9%) from the first seven months of 2010, a good result given the higher savings by consumers and weak consumer and business confidence levels.
The industry is now projecting sales to reach 988,000 for the year, less than the 1 million unit forecast earlier.
But that shortfall is as much due to the impact of the Japanese March 11 disasters which slashed exports to Australia from Japan and saw local production levels cut by 50% for a month or more by Toyota.
The floods in Queensland in January cut car sales in that state by thousands as well and much of the lost sales haven’t been made up.
The FCAI’s Acting Chief Executive Steve Payne said in a statement yesterday:
“While the drop in sales in July is small compared to the same month last year, the overall drop in sales for the year to date of 5.9% indicates that consumers are continuing to delay new vehicle purchases.
“The supply of vehicles and components from Japan, following the earthquake and tsunami in March, has improved, however sales of several popular models were still affected by supply constraints. Sales of SUVs continue to grow, with an increase of 1.8% compared to July 2010 and, in particular, Luxury SUVs have had a very strong year, with year-to-date sales up 17.4%.
“We expect annual sales to be around 1 million vehicles for 2011.”
Toyota bounced back and returned to the top of the sales charts as production and stock levels recovered in the wake of the Japanese earthquake and tsunami disaster on March 11.
Subaru also had a strong month, increasing over June.
Holden’s Commodore returned to its top-selling position for the month and has once again crept ahead of the Mazda3 as Australia’s most popular car for 2011.
After seven months, the Commodore leads the Mazda3 by just 81 units.
The Ford Falcon and Ford Territory were a surprise double act in the top 10 for Ford Australia.
The locally built Holden Cruze was just 168 units away from topping the Mazda3 an
