This article is from the Australian Property Journal archive
RETAIL sales remained week across April, with a minor bump of 1.3% on the same month in 2023, with most discretionary categories still in decline.
According to the latest data from the Australian Bureau of Statistics (ABS), national retail spending came in at $35.7 billion over the month, for a monthly increase of just 0.1%.
The strongest growth was seen in the “other retailing” category, which includes recreational goods, cosmetics and sports, with an increase of 4.7%.
“Other retailing is the only standout performer in April, and that’s typically because beauty products are the last category to be affected by economic downturns,” said Paul Zahra, CEO at the Australian Retailers Association.
“Whilst we had an earlier Easter than usual in 2024, spending across the two months has significantly softened across discretionary spending categories, with food and takeaway bolstering overall sales figures.
Both the food category and cafes, restaurants and takeaway followed with an annual 1.9% increase in April.
“The 0.7 and 0.5 per cent [monthly] fall in clothing, footwear, and personal accessory retailing, and food retailing respectively, reveal dire spending constraints on households,” said Lindsay Carroll, interim CEO at the National Retail Association.
“Retailers were hoping for a shot of relief from the Federal Budget to float them through following months of low consumer spending, only to be underwhelmed by the provisions made for business owners.
“The subsidised energy costs and instant asset write-off extensions, while all welcome, have failed to take into account the high cost environment businesses are currently operating in.”
Household goods fell for the fifth month in a row, dropping 1.3%. Clothing, footwear and accessories were down 2.5% and department store fell by 1.3%, both seeing declines for the second month in a row.
“Department stores, household goods and clothing, footwear and accessories remained in decline across both March and April, which is a worrying sign for retailers. Household goods have suffered significantly. The category recorded once-off sales growth in November during the Black Friday sales – but has otherwise remained in decline for more than 12 months,” added Zahra.
“The ongoing cost-of-living pressures, interest rate ramifications and increased cost of doing business make it a very challenging period for those in the discretionary retail sector, particularly for SMBs.”
All states and territories saw annual growth, with the Northern Territory up 3.7%, Tasmania up 2.7%, Queensland 2.2%, South Australia 1.7%, Western Australia 1.6%, ACT up 0.9%, NSW up 0.8% and Victoria up 0.6%.
“Consumers have reigned in their spending in response to a host of cost-of-living pressures, causing retail sales growth to grind to a halt over much of the past year,” said Sean Langcake, head of macroeconomic forecasting for Oxford Economics Australia.
“There is some help on the way for household finances from the May Budget, with tax cuts and subsidy payments set to boost cashflow from July. But this is unlikely to be enough to completely shake consumers out of their current funk. We expect momentum in retails sales will remain subdued over 2024.”
