Figures paint bleak Christmas picture

RETAIL spending posted its third consecutive monthly drop in December while in trend sales have retreated for the first time since 2000.

RETAIL spending posted its third consecutive monthly drop in December while in trend sales have retreated for the first time since 2000.

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 near 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 on Christmas and the December half 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 data ignoring 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," he 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."

St George Bank economist Janu Chan said it seemed it wasn't a good Christmas for retailers.

However, she said, other parts of the economy within retail services were stronger.

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