Now that we are well and truly back from the Christmas break, NPR Co. has taken some time to see how well our retailers faired over the holiday period. The latest ABS retail trade figures show that turnover across Australia increased 0.9% in January, seasonally adjusted. The major contributors to such a strong result were the “other” retailing category with growth of 2.6% and household goods with a 1.3% uplift.
Having a look at the numbers at a state level indicate that Queensland also contributed 0.9% growth in January from the previous month, seasonally adjusted. Even though these results look good, NPR Co. analysed the five major retail categories to see how they have performed over the last five years. Assessing the turnover data on a year on year basis provides a better understanding on how individual categories were tracking compared to the same period the year before.
As can be seen from the graph above, the story for retail growth in Queensland has been slowly improving throughout 2012 when year on year growth for the total industry was at 3.0% in January 2012. Moving forward into 2013, turnover growth has increased to 4.8%, the highest level for over five years. The most pleasing aspect of this result is that all key retail categories in Queensland are recording positive growth and not one particular category has been “carrying” the others along, which has tended to be food retailing when economic times are tough. Household goods retailing which grew by 3.3% in the year to January 2013 has really turned the corner in recent times after recording declining sales for most of the last five years. Department stores have also been mirroring the household good turnaround in the last six months, posting a 2.6% increase in turnover year on year.
These retail results seem to be reflected in other consumer measures which have been released. The latest Westpac Melbourne Institute Index of Consumer Sentiment rose by 2.0% in March after a leap of 7.7% in February. The measured index has now been in positive territory for five consecutive months and is at its highest level since December 2010. Although not all the cash rate reductions provided by the Reserve Bank have been passed on, there has been an acceptance by consumers over time we are in a low interest rate environment. In addition to this, the share market is up over 20% from September last year.
The positive news on the “bricks and mortar” retail front is that even though turnover has increased, online spending has also increased which reflects the more active consumer activity and confidence in the marketplace. According to the latest NAB Online Retail Sales Index, sales for online retailers increased 27% to an estimated A$13 billion in the year to January. This volume is now equivalent to 5.8% of traditional sales (excluding food) with growth in domestic online retail sales outstripping those being completed with international online retailers.
The outlook for retail in Queensland during 2013 remains strong after such a positive start to the year. The continued challenge for traditional retailers is the need for continual evolution to match and complement the offer provided online through new marketing mediums and sales platforms (which NPR Co. is going through in its own way right now!).
Please contact us if you would like to utilise our knowledge of the retail industry for your project.
The National Property Research Co.
Ph (07) 3229 0111
Level 1, 307 Queen Street
Brisbane QLD 4000