At first glance, the Abbott honeymoon or normal post-election surge certainly shines through in the September retail sales statistics – a better performance on all measures than the tipsters were expecting. It looks like it wasn't just David Jones customers who came out buying.
But as an Australian Bureau of Statistics feature published with the numbers points out, retail sales aren't the guide to consumption growth that they used to be. And department stores are no guide to overall retail performance, let along household consumption.
Shrinking share of consumption.
As the ABS points out, retail trade estimates historically contributed 55 to 60 per cent of household final consumption expenditure. Now it's only about 30 per cent as households spend a greater proportion of their income on services.
Unfortunately there's a generation of commentators, not least from the retail industry itself, who are yet to adjust their perspective. We're all shoppers so retail news makes headlines, but it doesn't mean as much as it used to.
As has been written here before, that's all the more so for the department store sector, especially those media darlings, David Jones and Myer. Department stores make up the smallest of the six ABS categories but receive wildly disproportionate media coverage.
Just how silly that is can be seen in today's statistics: even though the department stores category enjoyed a rise in September (up 0.2 per cent in trend terms), it is the only one of the six categories to still be down on what it was a year ago. And "department stores" includes the well-performed Kmart and Big W chains as well as the struggling employers of super models.
So totally ignore whatever David Jones and Myer CEOs might be saying as a guide to what consumers are up to and filter the overall impact of retail sales as well.
Even as a guide to retail sales, the monthly ABS retail sales aren't totally clear. The nice story shown Monday in the retail sales trend series is only possible with some hefty revisions to the previous month's count. The latest count shows August matching September with a gain of 0.3 per cent and July was up 0.2 per cent. A month ago, August scored zero growth and July was 0.1. A post-election surge can do that to history.
The ABS is working to extend the scope of the retail sales numbers, potentially including our spend on energy, but in the meantime the share of the national purse snared by shopkeepers is heading in one direction.
The backbone of retail sales in 1960 – food, clothing, furnishings and household equipment – took care of 38 per cent of household consumption. Last year, they represented just 18 per cent of spending. Food by itself was 18 per cent of consumption in 1960 and the largest single share of household expenditure. Now it's 10 per cent and holds second place.
Thus the usual tabloid/shock jock/politician whinge about food's role in the cost of living tends to be misplaced, never mind the sort of deflation Woolworths and Coles have been reporting.
The flip side to the decreasing importance of retail (and these figures include domestic online shopping) is the rise and rise of services. The ABS feature says imputed rent for owner-occupied housing, education, communication, recreational and cultural services took 10 per cent of our spend in 1960, but 27 per cent last year.
We're certainly buying much more stuff, but it's taking a much smaller proportion of our higher incomes. With what's left over, we're putting more into housing, education and doing things, and then talking on our mobile phones and Facebooking about it.
The challenge for retailers now is that they aren't just competing against other retailers, but with all the other temptations we have to spend money. As Flight Centre and car sales numbers continue to confirm, the Australian consumer has not been on strike – he and she are just choosier about where they prefer to spend.
Michael Pascoe is a BusinessDay contributing editor.