June stocktake set to trigger retail splurge

Queensland retail trade experienced a 0.8 percent spike over April, contributing to a slow recovery across the country

June stocktake set to trigger retail splurge
June stocktake set to trigger retail splurge

Queensland retail trade experienced a 0.8 percent spike over April, contributing to a slow recovery across the country, according to the Australian Retailers Association (ARA).

Results ranged from New South Wales jumping by 1.3 percent, to the Northern Territory dropping by 4.6 percent.

In terms of retail sectors, food sales fell by 0.2 percent, department store sales dropped by 2.8 percent, and restaurants and takeaways sales slipped by 0.5 percent; while clothing and soft goods sales rose by 0.8 percent, household goods sales grew by 3.9 percent and ‘other’ retailing sales edged up by 0.1 percent.

ARA Executive Director Richard Evans says the 0.3 percent national growth in retail turnover for April was made up of improved but sporadic growth.

He adds that bigger-ticket items like furniture and whitegoods could see improved sales growth in May, as first home owners take advantage of the government grant and furnish new houses.

"This sort of patchy recovery across retail sectors reflects the inconsistency between low consumer confidence and increased available spend," he says.

"With low interest rates and lower petrol prices, consumers are cashed up but their confidence is still being dampened by negative economic rhetoric which is reflected in inconsistent spending across retail sectors.

"April’s growth in household goods retailing (3.9 percent) indicated cashed-up consumers were slowly coming out of financial hibernation without guilt and spending money on purchases they’ve been delaying over the past year."

Australian National Retail Association (ANRA) Chief Executive Margy Osmond agrees that April’s figures are largely due to government support.

"Across the country, $19.3 billion went through retailers’ tills in April, that’s $56 million more than in March," she says.

"Access Economics estimates the Government’s handouts contributed $615 million to retail sales in April."

Osmond says department stores are "riding the cash-handout rollercoaster", after experiencing a poor start to 2009 before sales bounced strongly in March.

"It’s encouraging to see most of this activity continue in April even if sales were down by 2.8 percent. We’ll be watching closely to see if sales stabilise over coming months," she says.

As the June stock-take sales take off in the next couple of weeks, the ARA predicts further recovery in clothing and soft goods, as well as department stores.

"Retailers remain optimistic about improved growth in the September quarter with the mitigating factor for economic recovery being employment," Evans says.

"However, recovery will be patchy across sectors with retailers looking forward to more growth, but with some slow trade in the months ahead."

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