The unthinkable has happened to Australia’s shopkeepers: growth in retail sales over the last financial year has been the lowest since records began. And this during the most sustained global upswing in trade, corporate profits, jobs and executive salaries in decades.
The dismal data
The latest numbers from the Australian Bureau of Statistics (ABS) show total retail sales for 2017-18 at $315.8 billion. This is an increase of $7.8 billion – or just 2.55% – over the previous financial year.
Only twice since the ABS began publishing retail figures 36 years ago has annual growth been below 3%. It was 2.75% in 2010-11 at the depths of the worst global recession in 80 years. And the latest figure – the lowest on record by a fair margin.
This is not an aberrant result. The rate of growth has fallen each year for the past four. It slipped from 5.00% in 2014-15 to 4.01% the following year, then from 3.17% in 2016-17 to the current all-time low — 2.55%.
Sectors in strife
Of the five retail sectors the ABS tracks the worst hit was department stores with a rise of just 0.24% over the previous year. The household goods sector rose 1.74%. Clothing and footwear rose 2.18%. These are substantial real declines.
Slightly more positive were restaurants and takeaway food services – up 2.85% – and food – up 3.18%.
Retailers’ Association in denial
This disastrous annual result is a blow to the retailers’ peak bodies, the mainstream media and the Turnbull Government. All have been spruiking great results for small business under the Coalition.
The Australian Retailers Association (ARA) issued a media release that ignored the full year outcome and hailed one small aspect of the ABS report – the tiny increase just in the latest month.
Headed “Retailers jumping for joy with June trade figures”, the release focused solely on the June 2018 gain over June 2017. ARA executive director Russell Zimmerman claimed the figures “represent a fair trade for the end of financial year, with a 2.87% total growth year-on-year.”
He neglected to mention – or he may be unaware – that 2.87% is less than half the long term June-over-June average rise of 5.89%. Allowing for inflation and population, it is a significant decline.
There was no comment from Australia’s minister for small business, Craig Laundy, the fourth minister in three years.
The finance press, predictably, refused to report anything that might be construed as negative for the Turnbull government.
The heading of FXStreet’s puff piece was “Australia: Retail sales rebound – Westpac”.
This quoted a bank analyst claiming Australia’s June retail sales results were higher than “expectations”.
ForexLive also ran a positive report with the bold subheading, “Retail sales from Australia for June and the quarter came in better than estimates”.
Business Insider’s heading was “ON A ROLL: Australian retail beats for a third straight month”.
What was “beaten” again were the imaginary “expectations”.
The Australian headed its report “Retail spending rise in June beats forecasts”. It reassured readers that “Australian retail sales rose solidly in June despite widely held concerns that consumers are under stress due to soft wages growth and high debt burdens.”
Even the ABC concealed the stark reality with a piece titled, “Retail figures grind higher as consumers buy into mid-season sales”.
None mentioned the all-time-low annual outcome.
The rest of the world
Meanwhile, retailers in most other developed countries are taking full advantage of the current global boom.
Only two of the 34 developed countries in the Organisation for Economic Co-operation and Development (OECD) have experienced substantial declines over the last four years – Ireland and Australia – with the latter faring worse of the two.
This confirms that the causes are local rather than global.
What has brought this about?
Causes, as Crikey has regularly reported, are depressed wage rises over the last four years, wage cuts for many workers, pensions failing to keep pace with costs, unemployment and underemployment remaining entrenched and the tax burden having shifted from corporations and high-income professionals to wage and salary earners.
Hence low- and middle-income Australians – the vast majority of shoppers – no longer have the spending money they once had.
Such is life in Turnbull’s Australia.