Two speed retail

By Leith van Onselen

As noted by Houses and Holes earlier today, Australian retail sales fell -0.2% in the month of April, which was below consensus estimates of a 0.2% rise.

For me, the most interesting aspect of the Australian Bureau of Statistics (ABS) release was the two-speed nature of the result.

First, there was the wide divergence in performance of the various components of retailing, with “food retailing” and “cafes, restaurants and takeaway services” performing relatively strongly, while consumer discretionary purchases, such as “department stores”, “clothing, footwear and personal accessories”, and “household goods retailing” experienced negative growth over the year (see below chart).

It seems that Australia’s status as the fifth most obese nation in the world is safe for now.

Second, due to the commodity boom, there is a huge divergence in Western Australia’s retail sales growth and everywhere elses (see below chart).

Australia’s very own PIIG, Victoria, looks to be fairing particularly badly. Not only are home prices tanking there, but it’s the only state to record negative retail growth over the past year, mostly caused by a very poor April.

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Comments

  1. “Let me see. Should I get rid of all this old stuff I have in Melbourne and buy new stuff when I get to Perth, or pay to take it with me?”

  2. ‘Australia’s very own PIIG, Victoria’

    I suspect we’re going to hear that a lot more!

  3. Hi Leith

    I went to check the ‘Retail Sales Total by State’ (last figure) to calculate the real retail growth but can only match your result for WA, NT, Queensland and the total using ABS 850103.

    NSW: 0.72%
    Victoria: 2.62%
    Queensland: 3.38%
    South Australia: -0.07%
    WA: 9.33%
    Tasmania: 0.47%
    NT: 3.55%
    ACT: 0.10%
    Australia: 2.65%

    This is for the original data, although I get similar results for seasonal yearly change and trend yearly change.

    I am comparing the sum of total (industry) for each state between
    May 2011 – April 2012 and
    May 2010-April 2011.
    What else should I be considering?

    • outsidetrader

      I think you need to compare April 11 to April 12 to find the annual growth rate.

  4. The Patrician

    Do the sales figures break down into industry results per state?

    eg department stores in Vic

  5. ‘It seems that Australia’s status as the fifth most obese nation in the world is safe for now.’

    I think I’ll have a cake to celebrate.

  6. Obesity and economic shrinkage is highly correlated. Check the most recent economic-medical journals. Public sector spending will bleed the country dry as health care and lost productivity eat into more tax revenues. Ban beer. Ban fast food. The only two options to reverse FATNESS. So now you know it can’t happen. Another (if more were ever needed) that OZ is going down the plug hole. Better get out there and build bigger plug holes !!!!!!!!

  7. Pointe Gourde Principle

    Looking at the “Sales Growth” chart, big negatives for Department Stores. I assume that includes Myer.
    .
    Looks like the inflated retail rental model of the Gandel Group, Westfield et al is about to come under stress.
    .
    Here is an interesting article from The Age, best quote:
    .
    “AUSTRALIA’S biggest shopping-centre operators, Westfield Group, Stockland and GPT Group, are lowering rents for new stores while existing tenants call for cuts as major mall sales drop for the first time in a decade.
    .
    “Myer, the nation’s largest department store chain, will close as many as a quarter of its outlets as leases expire if rental costs, estimated at 52 per cent higher than those paid on average by New York-based Saks, aren’t cut.
    .
    “Premier Investments, the largest operator of small stores, is closing 50 shops and seeking lower rents at remaining sites.”

    http://www.theage.com.au/business/tenants-force-malls-to-cut-their-rent-as-sales-slump-20120530-1zjhn.html#ixzz1wPSZ9mE3