Christmas not so merry for retailers
Figures released by the Bureau of Statistics on Wednesday revealed national retail sales fell 0.2 per cent in December to a seasonally adjusted $21.42 billion.
For the December quarter sales were limp, gaining only 0.1 per cent to $63.74 billion in seasonally adjusted terms.
Within the retail sector there was a divergence of performance.
Clothing, footwear and personal accessories proved resilient, rising 2.1 per cent in December, but department store sales were flat at 0.8 per cent with sales of household goods also up 0.8 per cent.
The weakest sales, and a surprise to some economists, were in the "other" segment (down 2.8 per cent) which includes cosmetics, newspapers and books, while sales at cafes, restaurants and takeaway food outlets fell 1.1 per cent in December.
Further evidence of a lacklustre Christmas trading period - for many retailers the most important time of the year - will emerge in coming weeks as companies report their profit results.
Retailers such as Wesfarmers, Woolworths, Harvey Norman and department store owners Myer and David Jones will update investors soon, with some already reporting flat sales for the holiday season.
Releasing second quarter sales last week, Wesfarmers managing director Richard Goyder commented: "I wouldn't say it was a booming Christmas but it was a reasonably good Christmas."
Coles posted same-store, or comparable, food and liquor sales growth of 3.9 per cent for the second quarter (which takes in Christmas), while rival Woolworths said its flagship food and liquor business posted a 2.5 per cent increase in second quarter same-store sales.
The latest national figures from the Bureau of Statistics paint a bleaker picture. Nominal retail sales fell 0.2 per cent in December, which was weaker than expectations (the market consensus was for a 0.3 per cent gain). Retail sales in December were lower than three months prior, and in trend terms monthly retail sales fell slightly for the first time since 2000.
ANZ head of Australian economics Justin Fabo called the figures a "soft outcome" but said most analysts already knew total retail spending was weak, with the data not capturing overseas expenditure on holidays or offshore online purchases.
"Retail accounts for around 30 per cent of household consumption and it's the weakest part and has been for the last year or two," Mr Fabo said.
"The trajectory of retail sales [from December] was not very favourable moving into this year, despite some of the anecdotes being a bit more positive."
Frequently Asked Questions about this Article…
The Bureau of Statistics reported national retail spending fell 0.2% in December to a seasonally adjusted $21.42 billion. December marked the third consecutive monthly drop and, in trend terms, monthly retail sales retreated for the first time since 2000 — signalling a weak Christmas trading period for many retailers.
There was a clear divergence: clothing, footwear and personal accessories rose 2.1% in December, while department store sales and household goods were around 0.8%. The weakest area was the “other” segment (which includes cosmetics, newspapers and books), down 2.8%, and cafes, restaurants and takeaway food outlets fell 1.1%.
For the December quarter retail sales were subdued, gaining only 0.1% to $63.74 billion in seasonally adjusted terms, according to the Bureau of Statistics.
Coles reported second-quarter same-store (comparable) food and liquor sales growth of 3.9% (which includes Christmas), while Woolworths said its flagship food and liquor business posted a 2.5% increase in second-quarter same-store sales. Wesfarmers described the period as not booming but “a reasonably good Christmas.”
Retailers expected to update investors soon include Wesfarmers, Woolworths, Harvey Norman, and department store owners Myer and David Jones. The article notes some companies had already reported flat sales for the holiday season.
ANZ head of Australian economics Justin Fabo described the figures as a “soft outcome,” noting most analysts already knew total retail spending was weak. He also pointed out the official data doesn’t capture overseas holiday spending or offshore online purchases, and that retail — about 30% of household consumption — has been the weakest part of spending for the past year or two.
The nominal retail sales fall of 0.2% in December was weaker than market expectations, where consensus had been for a 0.3% gain, so the Bureau of Statistics’ national figures painted a bleaker picture than some company-reported anecdotes.
Everyday investors should watch upcoming profit results and trading updates from major retailers (including Wesfarmers, Woolworths, Coles, Harvey Norman, Myer and David Jones) to see how the weak December retail numbers translated into company earnings and same‑store sales performance.
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