The National Australia Bank (NAB) will release its own official sales report for the retail sector today, but there are already signs of bad times.
NAB’s chief economist Alan Oster says that the upcoming report has a ‘very weak’ forecast for retailers.
The NAB’s cashless retail sales index is highly regarded as one of the more accurate reports when it comes to predicting the results of the Australian Bureau of Statistics (ABS) own findings on the nation’s economy.
Because it processes about two million cashless transactions per day, NAB has a wealth of data that allows it to report on retail spending behaviour to forecast sales trends. But if its newest report is right, a majority of those transactions are not going into retail sales.
The following months are also looking bleak, with Oster further stating that “ABS retail trade will fall 0.5 per cent a month on month basis, the weakest forecast in our series going back some half a decade”.
Phillip Chapman, director of Lease1, adds “another weak result such as this is the last thing the retail sector needs, with a decade of record low inflation and margin compression the industry needs to desperately find a savings in occupancy costs”.
NAB is certain that there are a number of issues (both locally and abroad) that could be behind this downward trend. Among these include costs in the housing market, low income growth among consumers, as well as competition from e-commerce (which NAB had reported on more positively in its March sales index for online retail).