ARA Retail Debrief Q4 2017

A BRIEF SUMMARY A BRIEF SUMMARY OF THE AUSTRALIAN RETAIL MARKET FOR SEPTEMBER - DECEMBER 2017

BY KATHERINE MECHANICOS [ARA]

RETAIL CATEGORY SPEND Last year we saw the retail industry average a 2.76% sales growth year-on-year (YoY), although this figure is not as strong as we might have hoped for, the Australian Retailers Association (ARA) are confident 2018 will bring greater opportunities for the industry. Fortunately, the last quarter of 2017 saw strength begin to return to the industry, as each month saw growth across all retail categories. Unfortunately, September trade figures showed the weakest (1.44%) YoY growth of the quarter, with Hardware and Building (-4.22%), Electrical Goods Retailing (-1.12%), and Furniture (2.98%) all showing a big drop in YoY growth due to the softness in the housing market 1 . October trade remained rocky, with a meek 1.82% YoY growth as Household Goods continued to drop significantly (-1.95%) 2 . November trade figures finally showed signs of relief, representing a slow but positive lead into Christmas with 2.87% YoY growth 3 . Regrettably, December retail trade represented a more conservative Christmas than

retailers would have liked, with a 2.49% total YoY growth 4 . The ARA and Roy Morgan release the only professionally researched retail predictions annually, and are proud to announce that the ARA and Roy Morgan 2017 pre-Christmas sales forecast was on par with the actual Christmas trade results released by the Australian Bureau of Statistics (ABS) earlier this year. The ARA and Roy Morgan predicted a 2.8% increase in 2017 pre-Christmas sales, forecasting Australians to spend more than $50 billion from 15 November to 24 December 2017 5 . After analysing November and December trade figures, the ARA and Roy Morgan have identified a 0.1% difference between our forecast and actual Christmas trade, as actual Christmas sales growth reached 2.7%, and shoppers managed to spend just over $50 billion during this period 5 . Although December trade figures were lighter than expected, November trade results were able to balance out the tills for retailers last Christmas.

ABS RETAIL TRADE : YOY % CHANGE (September - December 2017)

Dec 2017 Nov 2017 Oct 2017 Sep 2017

8.0%

6.0%

4.0%

2.0%

0%

-2.0%

-4.0%

-6.0%

-8.0%

RETAIL CATEGORY

RETAIL DEBRIEF | SEPTEMBER 2017- DECEMBER 2017

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