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The Australian Retailers Association (ARA) said the ABS Retail Trade figures released today showing 1.2 percent rise January in sales was further disappointment after a 0.9 percent fall in December sales and indicated a dismal post-Christmas sales season.

ARA Executive Director Russell Zimmerman said retailers who offered post-Christmas sales were expecting more significant growth and January sales gave a clear warning the Reserve Bank should not be raising interest rates while retail sales are falling short of expectations.

“Last month the Reserve Bank showed wise and patient strategy when they left interest rates on hold and these January retail sales figures are another sign that there is a long way to go before homeowners can manage any interest rate increases without stalling economic recovery.

“When compared to January 2008, this year there was a three percent growth in retail sales. This is not something for retailers to celebrate considering year-on-year growth from January 2007 to January 2008 was about 6.3 percent.

“The impact of the stimulus package artificially inflated the 08/09 Christmas and post-Christmas sales results. In the 09/10 holiday period, retailers are seeing a more accurate reflection of consumer trepidation after successive interest rate rises and without help from government hand outs.

“The post-Christmas period begins on Boxing Day and goes through until mid January and at this stage it appears retailers have fallen well short of projections of $6.77 billion (4.1 percent growth). Early indications are pointing towards a growth more like 2.2 percent or $6.66 billion,” Zimmerman said.

In January sales rose across five industry groups: Department Stores (7.2%), Clothing, Footwear & Other Personal Accessory Retailing (2.9%), Other Retailing (1.4%), Food Retailing (1.3%) and Household Goods Retailing (0.6%). Sales fell in Cafes, Restaurants & Takeaway Food Services (-3.1%).

South Australia (3.7%) recorded the strongest growth in sales in January, followed by Western Australia (2.6%), Victoria (1.5%), the Australian Capital Territory (0.8%), Queensland (0.7%), the Northern Territory (0.6%) and New South Wales (0.4%). Tasmania was unchanged in January.

“Retail trade for January 2010 confirmed retailers are still posting inconsistent growth and the Reserve Bank did the right thing by keeping interest rates on hold last month. With consumers struggling with back to school costs and credit card bills from Christmas, retailers are not expecting a good February. The ARA is now calling on the Reserve Bank to hold interest rates and for Fair Work Australia to be mindful of any unnecessary wage bill pressures when they start their minimum wage review next month for retailers who are yet to fully recover from the impact of the economic downturn,” Zimmerman said.

For over 105 years, the Australian Retailers Association (ARA) has been the peak industry body in Australia’s $292 billion retail sector which employs over 1.5 million people. As an incorporated employer body under the Workplace Relations Act and with a range of member services including business consulting, policy development, advocacy and education, the ARA promotes and protects over 5000 independent and national retailers throughout Australia.

Source: http://www.retail.org.au/index.php/news/Dismal_January_retail_trade_points_to_soft_post-Christmas_sales_-_Retailers_caution_on_interest_rate_rise_and_minimum_wage_rises