Retail trading is always hard early in the year according to the Australian Retailers Association (ARA) whose executive director Richard Evans said the negative two percent growth in retail turnover for February reflects a traditionally tough time for retailers.

Evans said the retail sector has been retracting since coming off the peak of the retail cycle last year but retailers remained cautiously optimistic about improved growth in the September quarter as long as employment levels remained under six percent.

While families deal with back to school costs and hangover credit card bills from Christmas, February is always the hardest month for retailers and the negative growth (NSW -2.4 percent, VIC -1.3 percent, QLD -2.2 percent, SA -2.4 percent, WA -2.7 percent, NT -0.1 percent, ACT -0.5 percent) reflected normal consumer behaviour at this time of year.

Turnover for department stores (-9.8 percent), clothing and soft goods retailing (-2.7 percent) and household goods (-3.8 percent) this February are coming off the back of strong trade in December and January with heavy discounting during post-Christmas sales.

The drop in food retailing (-0.4 percent) and cafes, restaurants and takeaways (-1.3 percent) also reflects the end of Christmas celebrations.

There is more good news on the way for cashed-up consumers who will be better equipped to spend in the coming months with the Federal Government’s second stimulus package planned to hit bank accounts from April. However, the mitigating factor for economic recovery is employment.

Employers in all sectors need to hold onto staff to ensure cash continues flows through the economy, Evans said.