Retail Dips Amid “Challenging Conditions”
Australian retail turnover fell 0.5 per cent in May 2014 to just under $23 billion, seasonally adjusted, according to the latest figures from the ABS.
The drop was higher than April sales, which fell 0.1 per cent.
Several major retailers have been reporting slower growth, of late, amid a decline in consumer confidence.
Last month, JB Hi Fi downgraded its annual sales forecast to 5% growth for FY14 from previous guidance of 6-8%
and Dick Smith cited “challenging trading conditions, including further deterioration in Australian consumer sentiment, which has declined steadily,” in its recent pro forma guidance.
The sharp fall in consumer sentiment is believed to be linked to the austerity style budget recently announced by the Federal government as well as the mild seasonal weather, which is leaving retailers with excess stock. Earlier this week, the Reserve Bank alluded to “moderate growth” in consumer demand, as it held rates at record lows of 2.5%.
Department stores, clothing and footwear categories were the hardest hit sectors in May, while sales of electronic goods slipped just marginally, down 0.1%.
Overall, household goods retailing fell almost 1% and other retailing (-0.4 per cent). There was a slight rise recorded in food retailing.
Victoria made the largest contribution to the retail decline (-1.1%), followed by New South Wales (-0.5%), Western Australia (-0.3%), Queensland (-0.1%), the Australian Capital Territory (-0.3%) and Tasmania (-0.2%).
Marginal rises were recorded in South Australia and the Northern Territory.
The trend estimate for retail turnover was relatively unchanged in May