Consumer confidence
The Westpac-Melbourne Institute (“WMI”)
Consumer Confidence Index declined by
1.2% to 99.5 in March 2015.
Consumer confidence index - February 2014 to March 2015
The March 2015 result was on the back of a material
(8%) increase in February 2015. At 99.5 the index is
still 9% above the December 2014 low point.
The WMI notes that the 0.25% reduction in the
official cash rate in February 2015 was the primary
driver of last month’s improvement and suggests
the decline in March 2015 is consistent with the
historical dissipation of the initial effects of any
interest rate cut.
Consumer confidence sub indicies - February vs March 2015
The graph opposite shows a material worsening
in the sub-index tracking ‘time to buy a major
household item’ being the main reason for the
overall decline (the WMI suggests the depreciation
of the dollar is also likely to have been a contributing
factor to the result in this particular measure).
Retail sales
The Australian Bureau of Statistics Retail
Sales measure grew 0.4% (seasonally
adjusted) in January 2015, continuing the run
of eight months since the last contraction.
Seasonally adjusted growth in traditional retail sales
This result is 0.2% above the growth rate recorded
in December 2014 and continues the positive trend
in the growth rate over the past three months.
While the graph opposite shows there has been
some volatility in the rate of growth over the
past year, retail sales have grown (on a seasonally
adjusted basis) in ten of the last twelve months.
Category performance in January 2015 was a
reversal of the December 2014 results. Each
category that reported growth in January 2015
recorded little, no or negative growth in December
2014 and the two categories that contracted
this month were the two strongest categories
in December 2014. The contraction reported in
‘food retailing’ was the first for this category since
February 2014.
Retail Sales by category - January 2015
Geographic results were mixed. Tasmania recorded
strong growth and Queensland recorded its fifth
consecutive month of growth, while The Northern
and Australian Capital Territories both suffered
material contractions (continuing a declining trend
in growth rates for each territory over the last three
months).
Retail Sales by geography - January 2015
Online retail sales
The NAB Online Retail Sales Index improved
0.3% in January 2015, building on the 0.1%
growth reported in December 2014.
NAB Online Retail Sales Index - monthly growth
The index is 9% higher compared to a year ago, but
the January result continued the trend of slowing
growth from double digit growth in prior years.
Despite the slow down, online retail sales are still
growing at a faster pace overall than traditional
bricks and mortar sales.
NAB report that online retail sales estimates
equate to 6.9% of traditional bricks and mortar
retail sales ($16.6 billion).
In the twelve months to January 2015, the most
material online retail sales growth was reported in
‘Electronic games and toys’ (27.3%), ‘Media’ (14.5%)
and ‘Department stores’ (10.2%) categories.
‘Daily deals’ continues to be the worst performing
category, contracting 7.7% since January 2014.
Authors
Jason Ireland
Partner
Keith Crawford
Partner
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