However, it is likely to be a continued struggle for many smaller retailers, especially those selling discretionary items that can be bought more cheaply online.
Landlords with retail investment in the mining states appear well-placed, with WA annual retail growth to November standing at 8.6% and Queensland at 4.8% per annum, compared with NSW managing just 2.2% annual retail sales growth and Victoria. 1.2%.
At face value, the November ABS figures were a disappointment, with the market tipping a 0.3% rise in November and earlier rate cuts in May and June totalling 75 basis points appearing to have little impact on consumer spending.
With October’s flat outcome left unrevised, the annual pace of retail sales growth moderated further to 2.9%.
Westpac economist Elliot Clarke points out that in trend terms, retail sales are now growing at “an insipid 0.05% per month – a 0.6% annualised rate”.
He also points out that all the growth in retail sales in November was solely due to a 1.2% increase in “takeaway activity” with cafe and restaurant activity falling 0.4%.
“Arguably, this is further evidence of consumers economising, favouring eating at home over eating out. Basic food retailing was flat, possibly due to falling fruit and vegetable prices,” says Clarke.
Department store sales fell for a third successive month by 0.4%, clothing & footwear experienced its fifth consecutive decline (–0.6%) and household goods retailing declined by a further 0.9%.
Clarke concludes that retail sales growth will again be weak in December and in 2013.
However, CommSec economist Craig James notes that sales by “larger retailers” rose by 0.5% over November and “soared to record highs”, with larger retailers now accounting for a record 64.8% of all retail trade.
The large retailers segment refers to 500 of the biggest retailers in surveyed by the ABS each month, whose results are not weighted due to their size, unlike the 2,750 ‘smaller’ retail businesses that are weighted.
The ABS does not provide details of which businesses are included in this category, but says the results indicate that some of the larger business chains such as supermarkets are doing well, while others (notably department stores) are struggling.
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