Retail Sales — January | By the numbers
- Retail turnover lifted by 0.1%, or by $29.3m, in January to $A27.012bn. The market forecast was for a +0.3% outcome. Turnover declined by 0.4% in December.
- Annual turnover growth eased from 2.8% to 2.7% on seasonally adjusted figures, however; in trend terms, sales growth again slowed at a faster pace down from 3.1% to 2.8%.
As would be expected, the soft headline outcome was reflected in the underlying detail. In nominal terms, turnover lifted by $29.3m in January, however spending on food was the main factor rising by $33.9m. Removing the impact of food sales, turnover declined by $4.6m.
The full detail across the categories for January was; food +$33.9m (+0.3%), household goods -$2.1m (0.0%), clothing and footwear -$6.2m (-0.3%), department stores -$32.8m (-2.1%), 'other' (includes items such as pharmaceuticals and cosmetics) +$26.4m (+0.7%), cafes and restaurants +$10.0m (+0.3%).
The state-based outcomes were soft in January, except for a 0.7% rise in New South Wales — the state accounts for a little above 30% of nominal retail spending nationally. If New South Wales' contribution was removed, retail spending would have fallen by 0.1% in the month.
Though a decent outcome for New South Wales in isolation, retail activity has been weakening in recent months highlighted by a 0.5% fall in spending in Q4. That is with the background of falling property prices combined with persistently weak income growth.
For the other states, Victoria lifted by 0.1%, though conditions look to have cooled over recent months after robust spending growth over the first 3 quarters of last year, Queensland -0.5%, South Australia +0.1%, Western Australia -0.3% and Tasmania +0.4%.
The Bureau also reported that it estimated online spending to have declined sharply in January by around 23% to $1.487bn. These estimates are in original terms so are not seasonally adjusted, though it has reported similar declines for January over the 5 years it has been producing these figures. As a percentage of total retail spending, the online space remained at 5.6%.
Retail Sales — January | Insights
This was a soft update and is consistent with the detail on consumer spending, particularly on discretionary areas, from yesterday's National Accounts for Q4. Households have had to settle for weak income growth over recent years, though strong employment growth been supportive. However, with saving falling to a very low level there are signs that would appear to be consistent with the thesis that declining property prices are impacting on consumption.
