Retail Sales — October | By the numbers
- National turnover was flat in the month on a seasonally adjusted basis at $A27.572bn; short of an anticipated rise of 0.3% and down on a 0.2% increase in September.
- Annual growth in turnover slowed from 2.5% to 2.1% to be at it softest pace in 2 years.
- In trend terms, turnover lifted by 0.2% in the month, with annual growth holding at 2.3%.
Retail Sales — October | The details
Retail turnover was little changed in October, declining by $9.0m (-0.03%) to $27.572bn, which followed increases of 0.4% in August and 0.2% in September. Annual growth in turnover has slowed to a 2-year low at 2.1%. Across the categories the detail was soft; food retailing lifted by 0.2% in the month (3.1%yr), though if this category (around 40% of total turnover) is excluded, sales ex-food fell by 0.2% in October (1.4%yr). Within this the outturns were; household goods 0.2%m/m (0.4%yr), clothing and footwear 0.2% (3.1%yr), department stores -0.1% (0.7%yr), 'other' 0.2% (3.0%yr) and cafes, restaurants and takeaway food 0.1% (1.8%yr).
Across the states, spending declined in New South Wales in October by 0.2% (1.5%yr) and fell by 0.4% in Victoria (1.3%yr). Together, these states account for around 60% of national turnover and if combined, annual growth has slowed to its weakest pace in more than 6 years at 1.4%.
In the other states, spending contracted by 0.5% in South Australia in October (0.8%yr), though increases were record in Queensland at 0.4% (3.7%yr), Western Australia 0.2% (3.0%yr), and Tasmania 1.4% (4.3%yr). As such, Tasmania takes over 1st place from Queensland in terms of the fastest pace of annual turnover growth in the nation — a title the sunshine state has held since March of this year.
Meanwhile, online retail spending lifted by a healthy 8.5% in October to $1.930bn according to the ABS's estimates to be up by 13.9% over the year. At 6.5% of total retail turnover, the online segment seems poised to rise to a record high next month on the back of Black Friday sales promotions.
Retail Sales — October | Insights
This was a disappointing update in light of the weakness in consumer spending highlighted in yesterday's National Accounts for the September quarter. Consumers are clearly cautious, with sentiment at pessimistic levels in the Westpac Melbourne Institute's monthly survey, and have focused on saving and paying down debt rather than spending the windfall from recent stimulus.