April +3.3%...a building block towards sustainable retail growth?
Having kicked off 2011 with a dismal 1.6% yoy growth in January, retail has since
managed to post 3 consecutive months above the 2010 average of 2.5% and posted an
encouraging yoy growth of 3.3% for April
While facing dual assaults from a buoyant online market, and a more cautious consumer
reining in spending, traditional retail appears to have retrieved a foothold in
the market
Victoria (+5.9%) and WA (+5.5%) led the growth, but there is no doubt the more solid
NSW performance up .7% to 2.3% YOY growth helped to seal April’s number
Supermarket behemoths have maintained the sales line at 3.6%. But food specialists
are the food story of the year so far, having come back from the brink of 12 months
of declines to post an average +5.5% yoy growth in the last 3 months
Eating out continued to perform well (+3.9%) but eased from the double digit highs
of last winter… perhaps we are seeing the return of the ‘Masterchef effect’, with
Australians inspired to create restaurant quality meals at home
As consumer confidence wanes (down 2points to 110), our consumption of feel good
products has regained momentum… pharmacy is back on its growth trajectory at +6.4%
for April. Liquor continues its buoyant 9 month trend, with +7.9%
But the big news in April was the return of the department stores, who likely bought
sales, and achieved +3.4% after six hard months of negative or flat growth
Other general merchandise categories experienced mixed results…
In DIY, furniture and floor coverings shone with +8.3%, trading places with hardware,
which dropped from 7.2% in March to 1.9% in April.
Electrical goods capped off 6 months of negative growth with a whopping -6.2% in
April – clearly in need of the next innovation as deflationary pricing and a more
cautious consumer take hold on one of the most discretionary categories.
In the world of soft goods, clothing experienced a muted 1.7% and footwear remained
flat at 0.3%
So, food has definitely got momentum and we are loving our liquor. Department stores
bought their way back into our wallets, but specialist general merchandise was largely
muted.
Major retailers will hope April is a key building block for the rest of the year…but
general merchandise specialists are still looking to find their way
But with the retail undergoing major change no uplift can be taken for granted….
with a competitive landscape that is now global due to the digital revolution reaching
a tipping point combining with a savvier, more empowered consumer… all retailers
must think hard about long term strategies to position themselves for sustainable
growth
If you would like to understand your category in more detail, your relative performance,
or how to better engage your consumer, RetailOasis has extensive retail experience
and can assist you with future business development based on rigorous quantitative
analysis and insights. Contact Steve Kulmar or Nerida Jenkins at RetailOasis on
+612 9976 6222 or follow the link below to order a report
Click here to view detailed report.
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