It sure is patchy. There is more money around as witnessed by electronic spending running at a faster growth rate now than in 2009 and 2010.
But not all sectors are seeing this money; many are still experiencing declining sales. This dichotomy is evident in the summary measures graphed: all three of the discretionary category of merchants experienced higher growth rates in the three months ending July.
Dig deeper and there are contrasts.
We’re not buying more flowers or CDs for our loved ones but we are getting round to visiting the dentist and optometrist. We think it’s too soon to build houses or renovate but we are accumulating more appliances and whiteware.There’s more money flowing through the hospitality sector but, to put this spending into perspective, the growth is coming at the low point of the season, so it remains a mixed picture. Higher confidence is feeding through into greater spending. The world cup is imminent, so the hospitality sector at least will see this trend continue near term.
More generally, outlets typically associated with the discretionary dollars are reporting higher spending – travel company spend is accelerating after declining through 2009 and 2010. Clothing shops experienced a late season surge in July ahead of the seasonal lull in October/September.
But the budget pressure created by rising fuel and food prices and static debt levels remains a key constraint – and reason for wholesalers and retailers to remain prudent about forward orders.