Shoppers do less tapping at tills
THE growth in shoppers swiping, inserting or tapping cards has slowed markedly since April, suggesting retail sales have significantly worsened as consumers tighten their belts.
And while using a credit or debit card to pay for a coffee, pair of shoes or movie ticket remains popular, the rate of growth in cashless transactions has actually halved in the past two years, according to the National Australia Bank.
Such transactions are growing at a rate of 6 per cent a year, down from 12 per cent in 2015, research by the bank indicates.
The slowdown is likely to continue as the penetration of contactless payment systems reaches a limit, reflecting minimum spend requirements for cashless transactions, and the existence of a proportion of merchants who deal only in cash.
Collecting millions of daily transactions across its network, NAB said cashless sales fell 0.8 per cent in June, down from growth of 0.6 per cent in May and a sharp reverse from the 1.4 per cent growth recorded in April.
“It is getting worse,’’ NAB chief economist Alan Oster said. “The index shows that cashless retailing softened in May and June. This weakness has been most evident in food, household goods and clothing and footwear, and seems to have been broadbased nationally.”
This meant that already low cashless retail sales growth in Western Australia — where growth lags behind the eastern non-mining states — had further weakened, he said.
Mr Oster said that based on the bank’s research, Australian Bureau of Statistics figures were likely to show there was no growth in retail sales last month.
“This is consistent with a challenging environment for retailers, with demand from consumers subdued amidst weak wages and income growth,” he said.
“Strong competition both locally and from offshore also appears to be leading to margin pressure and limited inflation in the retail space, which is also weighing on the dollar value of sales growth.”
Cashless retail spending growth was fastest in the ACT, at 7.7 per cent and New South Wales, at 6.5 per cent. It was weakest in Western Australia, at 1.2 per cent.