Updated: Retail rebounds with 2.2 per cent rise

The Australian retail climate has bounced back from a poor February, with March Australian Bureau of Statistics (ABS) figures showing a seasonally adjusted rise of 2.2 per cent.

The ABS figures released today are a significant swing back into positive territory after a drop of 2 per cent in Feburary.

In addition, turnover for Australian Retail increased by 0.7 per cent in the March quarter, 2009, in volume terms.

All states and territories, aside from the ACT, experienced an increase in trade, and all industries grew as well, with the biggest increases being department stores (+13.2 per cent), and clothing and soft goods retailing (+6.4 per cent).

A number of IT retailers have been posting positive results recently, including Harvey Norman, and JB Hi-Fi.

The Australian Retailers Association (ARA) claimed the turn around was in line with what was expected and attributed the result to lower interest rates and last year’s stimulus package.

“There’s a three to six month lag time on measures such as the stimulus package,” ARA executive director, Richard Evans, said. “With the current stimulus package in mind, we expect the up-and-down trends to continue, and then see improved growth in the September quarter.

“Some of the biggest challenges facing retailers at the moment is negative narrative from public bodies, which we’re hoping to see some leadership emerge from the Government and media bodies, and job stability, which we’re hoping the upcoming budget will take steps to ensure.”

The retailers that were doing well are still doing well in the recession, Evans added, and those that were struggling are still struggling.

“On the whole retailers are doing a good job of managing through the process. Unit sales remain the same, so the only change we’re seeing is that margins are less – where people were spending $50 for a bunch of flowers, they’re now spending $40 instead.”

Simms International managing director, Danny Moore, said that from its perspective, the retail-heavy distributor was pleasantly surprised with both March and April's results.

“We have to take things a month at a time in the economic climate, but there have been pockets of really strong growth,” he said.

“The combination of low interest rates and unemployment figures that haven’t hit home yet have kept retail robust. If unemployment hits double digits we’re in trouble, but at the moment people are still feeling good and are cashed up.”

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