Small business sales improve in November
ANZ today released its monthly Small Business Sales Trends report which showed small business sales increased by 4.5% year on year (y/y) in November 2011. This is the seventh consecutive month of positive annual growth in sales for small businesses but year-to-date data remains consistent with generally subdued conditions.
Small Business Sales Trends – Highlights
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ANZ General Manager Small Business Nick Reade said: “November saw overall trading conditions for small businesses showing signs of recovery, with sales up this month by 4.5%.
“This is likely due to the outlook for interest rate reductions which appear to have gone someway to lifting the cautious mood of consumers, which has been impacting the spending habits of many Australians.
“Recent cuts to business lending rates, coupled with the slight lift in consumer sentiment should also start to see cash flow positions for small businesses easing.
“Overall it’s a slightly more optimistic story leading into Christmas trading and despite seeing relatively flat year-to-date growth figures, the consecutive monthly sales increases is an encouraging sign for small businesses,” Mr Reade said.
ANZ Head of Australian Economics and Property Research, Ivan Colhoun said: “While this is a mildly positive story, the data does highlight the gap between retail-related small businesses versus traditional trades and services and divergent performances by state, region and category of spending. This is really due to a complex mix of factors including changing consumer preferences and an increased range of direct competitors via rapid growth in the internet and international travel.
“Small businesses in appliances and electricals, clothing and fashion, and homewares and furniture are still seeing sales contract on a year-to-date basis, with sales down 0.4%, 3.0%, and 0.5% respectively.
“Restaurants are the only segment of retail-related small businesses that are performing strongly with growth of 10.2% year-to-date. Other food outlets such as fast food and bakeries are also looking better with sales growth of 6.0% year-to-date. Travel and entertainment also received a boost in sales in November, up 6.0% y/y, however it remains relatively flat on a year-to-date basis with sales up only 2.1% y/y.
“Across the states, Queensland, Northern Territory, Western Australia and Victoria all showed y/y growth in excess of 5% this month, but in year-to-date terms, Victoria remains the strongest performer with growth up by 2.9%. YTD sales remain negative in the ACT, Tasmania and NT. The recent pick-up in Queensland and Western Australia and tentatively in the Northern Territory could relate to the positive effects of the strengthening in resources-related investment activity occurring in these states, which is expected to strengthen further during 2012,” said Mr Colhoun.
The data is based on the value of credit, debit and Eftpos transactions processed through ANZ merchant terminals and all ANZ card transactions processed through other systems for businesses at least two years old with annual turnover less than $5 million. ANZ has approximately 20% market share of all card transactions.