Reality biting at last for local retail sector

Clear signs of a slowdown in growth appeared in retail sales for the month of June data from the Australian Bureau of Statistics yesterday.

The ABS said growth in monthly retail sales was 0.2% in June, the slowest so far in 2022 and the Bureau hinted that much of the strong recent growth was due to price rises and not rising volumes.

Ben Dorber, head of retail statistics at the ABS, said in commentary that: “While the 0.2 per cent rise in June 2022 was the sixth-straight rise in retail turnover, it was also the smallest so far this year.

Australian retail turnover rose 0.2% in June (seasonally adjusted) 2022 to another record level, according to the Australian Bureau of Statistics (ABS).

The actual rise in dollars was just $67 million, which is hardly convincing.

The June result followed a revised 0.7% rise in May 2022 (up from 01% originally reported and then a revised 0.4% in the second estimate), a rise of 0.9% in April 2022 the 1.6% in March, immediately after the Russian invasion of Ukraine and the first sign of a new and higher round of price rises.

“Given the increases in prices we’ve seen in the Consumer Price Index, it will also be important to look at changes in the volumes of retail goods, in next week’s release of quarterly data,” Mr Dorber said.

Retail sales were 12% higher last month than in June 2021 – the Consumer Price Index rose 6.1% in the same time, so the actual rise in retail sales will be around half the 12.2% figure.

“Results were mixed across the six industries, with turnover rising in three of them and falling in the others, as cost-of-living pressures appear to be slowing the growth in spending,” the ABS said

Cafes, restaurants, and takeaway food services had the largest rise, up 2.7% and was clearly the best performing sector over the quarter and the past year in particular with a 26% rise in sales.

The sector was followed by clothing, footwear, and personal accessory retailing (1.3%), and other retailing (0.5 per cent). Department stores saw the largest fall, down 3.7%, followed by food retailing (-0.3%) and household goods retailing (-0.3%).

Turnover rose in the Northern Territory (1.8%), Queensland (0.7%), the ACT (0.6%), Western Australian (0.5%) and Tasmania (0.5%).

NSW was the only state or territory where turnover fell, down 0.2%. Turnover was relatively unchanged in South Australia and Victoria.