Commsec has released its business sales index report for July 2018 and it is welcome news for the retail sector. The data – which measures the value of credit and debit card transactions processed via Commonwealth Bank merchant facilities – has seen a July annual growth rate of 16.6 per cent for retail stores, the highest increase since June 2006.
After a period of slow retail sales, hopefully this marks a turnaround for the sector in the second half of 2018.
The report also reveals that annual spending rose in every single state, with Queensland leading the charge with a 14.9 per cent rise, and all 19 industry sectors measured increasing in trend terms in July. In further good news, the annual growth in overall retail spending is the strongest in four years.
The report states that consumers are benefitting from retail deflation, with the price of a number of good and services falling. In addition, improved job security and the Reserve Bank maintaining record low interest rates are encouraging Aussie shoppers to spend more at the shops.
Although the Commsec report only tracks Commonwealth credit and debit card transactions, and covers spending more broadly than just retail, it certainly bodes well for when the Australian Bureau of Statistics (ABS) release their retail trade statistics for July in a few weeks time.
Meanwhile, last Friday I joined National Online Retail Association (NORA) founder Paul Greenberg in appearing before a senate committee hearing into the digital economy. Only four years ago in 2014 total online retail purchases in Australia represented just 2.4 per cent, thus far in 2018 it has risen to 8.3 per cent.
The rise of the online retail world – with global giants such as eBay and Amazon – poses a significant challenge for Australian retailers. Despite this, both the NRA and NORA are quite optimistic as to how the local sector can effectively adapt to the digital world. The ability to offer customers the best possible shopping experience, as opposed to merely the best prices, will be essential in the period ahead and I’m confident that Australian retailers are well placed to do this.
One issue that did get close attention was the impact so far of the imposition of the GST on low-value goods that came into effect on July 1. Although the evidence so far indicates that the new tax has resulted in little change, it is still far too early to formulate a conclusive judgement on its effectiveness. The NRA campaigned strongly for the change as we believe it important that local retailers are operating on a level playing field with their global rivals and we are confident that it will benefit domestic retailers in the long-run.
Finally, I’m pleased to say 16 female business leaders including myself have teamed up with the Heart Foundation and the Australian Chamber of Commerce to raise awareness on the risk of heart disease to Australian women. Every day 22 Australian women die from this illness, three times the rate of breast cancer.
With 55 per cent of the retail workforce female, I feel it especially important that the NRA to do its part to address this issue. In the period ahead, I look forward to using my voice and position to spread the word and in turn reduce the number of women being lost to heart disease.
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