Food retail takes a hit as restaurant sales rise

Posted by Isobel Drake on 5th February 2010

The latest ABS retail trade figures show that sales in December fell 0.7%, seasonally adjusted, although restaurant and takeaway outlets were big winners.

Sales declined in every category except Cafés, Restaurants & Takeaway Food Services – where sales surged 2.5%, continuing on recent positive sales trends for the sector. Restaurants and cafés had a difficult end to 2008 and start to 2009 but an economic resurgence has helped many return to more prosperous times.

High levels of consumer confidence and job security bode well for the sector in the year ahead.

Food Retailing, which includes supermarkets, bakers and fresh food stores, recorded a sales decline of 1.3% as the sector found it difficult to match record Christmas sales from 2008. The news came as little surprise given last week’s relatively soft results from Woolworths.

The retail bellwether recorded a 4.2% increase in sales for the first half, with their food and liquor division recording slower growth in the second quarter – 5.9%, compared to 6.8% in the first quarter. While great results for many companies, they fell short of analyst expectations and below the typical high-single-digit rate of growth the company has maintained over the past decade.

In seasonally adjusted volume terms, retail turnover rose 1.1% in the December quarter 2009 – in a sign of muted inflation and providing further understanding behind the RBA’s decision to hold off on another rate rise on Tuesday.