Consumers swap spending from stores to entertainment: Report
Monday, June 20, 2011/
Australian consumers are shifting their dollars from retail to experience-based activities, with the amusement and entertainment category recording the strongest sales growth of any sector, according to a new report.
According to the latest Commonwealth Bank Business Sales Indicator, the amusement and entertainment category experienced the strongest lift in spending in May, up 1.4%.
This category, which includes cinemas and bowling alleys, is also one of the strongest sectors in annual terms, up 12.3%.
The BSI is based on the value of credit and debit card transactions processed through the CBA’s merchant facilities throughout Australia, a sample of approximately 30% to 40% of the market.
The BSI posted a gain of 0.02% in May, with only four of 20 sectors suffering a fall in sales.
Retail stores continued to show weaker performance in May, down by 0.3%, followed by automobiles and vehicles, with sales down 1%.
The strongest lift in spending in trend terms was by amusement and entertainment, followed by contracted services – which includes building trades as well as veterinary services – and utilities, both of which were up 0.9%.
According to Matt Comyn, CBA executive general manager of local business banking, the latest figures confirm some sectors are benefiting from outside market forces.
“The amusement and entertainment category has continued to post positive gains, as especially cold weather in May looks to have driven consumers indoors to venues including cinemas and bowling alleys.”
CommSec chief economist Craig James says the latest results provide greater clarity on recent sales trends, which have been disrupted by events such as the extended Easter break.
“The trend results now show that February to April 2011 was a period of flat, to slightly firmer economy-wide spending,” James says.
“That is important as it’s shown that sales have actually been a little better than initially thought. That having been said, the gains being witnessed are minor and it’s unlikely that the pattern will change anytime soon.”
“Combined with the weaker economic data seen recently, we would therefore expect the Reserve Bank to remain on the interest rate sidelines.”
James says while there is still some patchiness across the economy, the “sector picture” remains positive, expecting retail sales in particular to pick up soon.
“The traditional end-of-financial-year sales [are] likely to drive higher numbers of consumers into traditional bricks and mortar stores,” he says.