Retail Sales — September | By the numbers
- Retail turnover increased by 0.2% in September to $A27.59bn to disappoint the market median forecast of 0.4% (prior: 0.4%).
- Turnover growth in annual terms was unchanged at 2.5% after allowing for a downward revision from 2.6% in the previous month. In trend terms, turnover lifted by 0.2% in September and 2.4% over the year.
- Retail volumes (nominal spending adjusted for price changes) fell by 0.1% in Q3, which was well below the 0.3% gain expected by markets and reversed a 0.1% increase in Q2.
- Annual volume growth swung from +0.2% to -0.2% and is at its weakest pace in 28 years.
Retail Sales — September | The details
Retail spending in nominal terms lifted by 0.2% in September to $27.59bn (+2.5%Y/Y), with gains coming from food (+0.1%), 'other' (+0.8%) and cafes and restaurants (+0.6%). Categories that declined in the month were; clothing and footwear (-0.5%) and department stores (-0.2%), while household goods were flat. Sales ex-food lifted by 0.2% in September and 2.1% for the year. In Q3, turnover increased by 0.6% with the details being; food +0.6%, household goods +0.8%, clothing and footwear +1.4%, department stores +0.1%, other +0.7% and cafes and restaurants -0.3%. Excluding food, turnover lifted by 0.5% in Q3.
Retail prices increased by 0.6% in the September quarter and was slightly above the 0.5% rise in Q2. Referencing the pass-through impact from a weaker Australian dollar, clothing and footwear prices lifted by 1.1% in Q3 to outpace rises from food (+0.7%), department stores (+0.2%), other (+0.4%) and cafes and restaurants (+0.8%). The main influence on prices over the past year has been from food, likely due to drought-related impacts.
Adjusting nominal sales for these price changes, total volumes fell by 0.1% over the quarter. The details were; food 0.0%, household goods +0.9%, clothing and footwear +0.3%, department stores -0.1%, other +0.3% and cafes and restaurants -1.0%. Volumes ex-food were down by 0.1% in Q3 highlighting weakness in discretionary-related demand.
The 4-quarter profile for retail volumes is; -0.1% (Q4 2018), -0.1% (Q1 2019), +0.1% (Q2 2019) and -0.1% (Q3 2019). As a result, the annual pace has fallen to -0.2% — its weakest since Q2 1991. Weighing on this has been price increases over the past 4 quarters of 0.8% (Q4 2018), 0.7% (Q1 2019), 0.5% (Q2 2019) and 0.6% (Q3 2019).
Retail spending was soft across the major states of New South Wales and Victoria in September, which combined account for nearly 60% of national turnover. For the month, New South Wales posted a modest 0.3% rise as spending stalled in Victoria. In Q3, spending lagged the national increase (0.6%) for both states; New South Wales +0.4% and Victoria +0.5%. Over the past year, turnover in Victoria at 2.6% has run at twice the pace of that in New South Wales at 1.3% and is also slightly above the national pace (+2.5%).
The details for the remaining states in September were generally positive; Queensland -0.1%, South Australia +0.2%, Western Australia +0.7% and Tasmania +1.0%. Standouts in Q3 were Western Australia (+1.6%) and Tasmania (+1.3%), with both Queensland (+0.4%) and South Australia (0.0%) soft. In annual terms, Queensland is leading the nation* (+4.2%) followed by Western Australia (+3.5%), while Tasmania is in line with the national pace but is notably weaker in South Australia (+1.7%). *Note ACT is running at a 4.3% annual pace but only accounts for a little under 2% of national turnover compared to 20% for Queensland.
Retail Sales — September | Insights
