ARA Quarterly Retail Debrief Q2

AUTUMNAL ANALYSIS REVIEWING APRIL - JUNE 2018 IN THE AUSTRALIAN RETAIL SECTOR

BY JOSHUA WALKER [ARA]

The second quarter of 2018 saw the retail industry continue along its ‘steady as she goes’ path, with overall sales growth averaging 2.7% year- on-year (y/y). While the Q2 result was nearly 1% down on the 3.57% y/y growth in its corresponding period from 2017, it remains in line with the previous quarter, which saw a 2.75% y/y lift in turnover. While a consistent overall growth pattern is beginning to emerge for the broader industry, signs of volatility are still present and consistency has been hard to come by for some categories. The Cafes and restaurants and Furniture retailing categories started the year off strongly, only to be usurped in Q2 by the Clothing retailing and Supermarket retail categories. April saw the quarter off to a slow start, posting a 2.62% y/y growth in turnover, compared to 3.08% y/y growth in 2017. Hardware and building (5.33% y/y) and Footwear and personal accessories (5.08% y/y) led the charge, while Newspapers and books (-5.33% y/y) and Other recreational goods (-3.98% y/y) were significantly down. The Department stores

category (-3.74% y/y) continued its rollercoaster trend, with a delayed start to winter holding back spending in fashion, while an early Easter holiday period was partly to blame for subdued results in Food retailing, with Specialised food recording a flat 0.28% y/y rise. 1 Total industry turnover growth for May was 2.49% y/y, well-below the 3.82% y/y rise recorded in May 2017. Time with family seemed to be the trend for consumers, with Liquor (5.95% y/y) and Specialised food (5.06% y/y) as the standout categories, while Newspapers and books (-9.55% y/y) and Other recreational goods (-0.86% y/y) continued to go backwards. Earlier-than- usual sales helped the Department stores category post its strongest figures since October 2017, recording a 2.49% y/y jump. Supermarkets (3.36% y/y) and Clothing retailing (3.54% y/y) produced solid results - bright spots for the industry in an otherwise flat trading month. 2 Rounding out the financial year, June produced slightly stronger results, fashioning a 2.87% y/y rise in total industry turnover.

ABS RETAIL TRADE : YOY % CHANGE (April-June 2018)

AVG JUNE MAY APR

8

6

4

2

0

-2

-4

-6

-8

-10

RETAIL CATEGORY

RETAIL DEBRIEF | APRIL 2018 - JUNE 2018

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