Retailers have reason to be hopeful of a very Merry Christmas in 2016, following the release of the Commonwealth Bank Business Sales Index (BSI) for September.
The BSI – released late last week – was jam-packed with good news for retailers on the consumer spending front and this should act as a real shot in the arm for the entire industry as we enter what is traditionally one of our busiest periods.
Following a sluggish year in consumer spending, due in large part (according to CommSec) to events such as the UK vote on the European Union and the Australian Federal Election, spending picked up throughout September. This should act as further confirmation that the Australian economy has steadily picked up the pace in the past three months.
According to CommSec’s September BSI – which measures spending broadly across the economy – there was a lift of 0.7 per cent in trend terms for the month of September.
The lift in the BSI for September matched the strongest gain in the past seventeen months and there hasn’t been a greater increase in the past two and a half years.
There was also a strong performance on a sector-by-sector level, with the September figures showing an expansion in trend terms across sixteen of the nineteen sectors covered.
In each individual State there was an increase in sales, with strong performances particularly in New South Wales, Queensland and Western Australia.
The September BSI figures should inject a real sense of confidence into retailers as the Christmas season approaches. Moreover, when you take into account the fact that the September BSI comes off the back of a record four-year low just a few months ago in July, the retail industry should feel assured that there will be a strong level of consumer spending between now and the New Year.
I should note that the NRA is contacted regularly by media organisations in the lead up to Christmas, asking for individual retailers to share their stories on the busy Christmas period. If you are interested in being interviewed and/or have some interesting stories on what your retail store is doing during the festive period, please feel free to contact the NRA.
Have a great week.
Dominique Lamb, CEO.