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Saturday, 9 January 2016

Retail trade trending up

Retail turnover

A decent result for Retail Trade, which increased by 0.4 per cent to a fresh high of $24.77 billion in November.

Trend retail trade has increased nicely from $21.7 billion at the end of 2012 to $24.7 billion.

Over the past 18 months total industry retail turnover has declined only once, in July last year. 


Year-on-year retail turnover growth improved to 4.3 per cent, which is well ahead of the 5 year average of 3.4 per cent.


State versus state

The long run data suggests that retail activity has largely followed house price growth, implying in turn that the economy probably needs dwelling prices to continue rising if household consumption is not to stall. 


Looking at the year-on-year figures suggests that retailers in New South Wales (+4.7 per cent) and Victoria (+6.0 per cent) have been the major beneficiaries of the "wealth effect" of rising house prices.

Slower growth has been experienced in South Australia, Western Australia, and particularly the Northern Territory, as mining construction activity tails off.


Industry groups

Over the long run much of the growth in retail turnover has been accounted for by consumables.

Although household goods retail has picked up strongly of late, department stores have struggled to main market share as online retail has taken hold.


All industry groups have seen solid growth in retail turnover over the past year, with house price growth making its impact felt here too.

Household goods retail turnover has led the way for some time now, with an impressive 6.6 per cent growth over the year to November.

Perhaps surprisingly the slowest annual growth was seen in the food retailing space, while department stores saw turnover slip in the month of November.


The wrap

Overall, a reasonable result that was in line with expectations, but one which suggested that for retail turnover to keep picking up from this level either house prices need to keep rising, or the household savings ratio will need to decline.