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Small business sales show mixed Christmas trading season

ANZ today released its monthly Small Business Sales Trends report which showed sales increased by 3.3% year on year (y/y) in December 2011. This is the eighth consecutive month of positive annual growth in sales for small businesses, driven by growth in the mining states as well as non-retail and services sectors.


Small Business Sales Trends – Highlights

  • Small business sales increased by 3.3% y/y in December 2011
  • Year-to-date growth remains relatively flat at 1.9%
  • Non-retail and services continue to outperform traditional retailers, with automotive (+8.2% y/y) and trades (+6.4% y/y) the best performers in December
  • Among the retail-related small businesses, restaurants retain the best growth rates, 10.0% y/y in December 2011, after 11.8% y/y in December 2010
  • Western Australia continues to surge ahead of other states, with 4.9% y/y sales growth in December
  • Regional and rural small businesses outperformed metropolitan-based businesses on a monthly basis (+4.5%y/y) and on a year-to-date basis (+2.6%)


ANZ General Manager Small Business Nick Reade said: “The December figures reflect a reasonable Christmas trading period overall, with sales up 3.3% y/y and 1.9% year-todate


“A better than initially expected Christmas period was also seen in general by retailrelated small businesses, with sales growth of 1.8% y/y. Anecdotal reports suggest retailers still had to discount strongly to achieve this growth rate and clear their stock.


“The year-to-date growth figure of just 1.9% is still a concern however and remains consistent with generally subdued market conditions. The divergence in performance between Western Australia and the less mining intensive states and territories is also becoming more apparent.


“Essentially what we’re seeing is still a very mixed story for small business sales, with wide gaps across geographies and between segments, particularly between retail versus the trades and services.


“While retail sales on the whole were positive, clothing and fashion and appliances and electrical had negative y/y growth, as they continue to experience difficult trading conditions. This sustained gap between retail and non-retail sectors could be due to a complex mix of factors, including changing consumer preferences and an increased range of direct competitors via rapid growth of online shopping.


“We’ll be looking for the momentum from Christmas trading to carry further into the new year. While consumers are still spending selectively, we’re hopeful that Australians will still look to support small businesses and help sustain the growth that’s slowly starting to become more consistent,” Mr Reade said.


Commenting specifically on small business sales data, ANZ Head of Australian Economics and Property Research, Ivan Colhoun said: “Restaurants had another good year of sales growth in 2011, with growth of 10.0% y/y in December and 9.5% year-to-date for 2011. Other food outlets also did relatively well in December up 4.4% y/y and up 5.3% year- to-date. Other segments of stronger growth were all in the services area, with automotive up 8.2% y/y and trades up 6.4% y/y.


“Across the states, Western Australia surged ahead of other states and territories, with 4.9% y/y in December. Victoria and South Australia also had stronger growth rates for 2011 as a whole, but this reflected better conditions experienced earlier in the year, which have since moderated. The other key resources states of Queensland and the Northern Territory also showed a strengthening in sales growth throughout the year. This pattern is also evident in other sources at the moment, including ABS retail sales and labour market data. It most likely relates to the positive effects of the pick up in resources-related investment activity occurring in these states, which is expected to strengthen further during 2012. In contrast, ACT and Tasmania, continue to report relatively weak small business sales,” Mr Colhoun said.


This 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.


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