Despite a 1.1 per cent year-on-year retail sales increase, all is not what it seems as the latest trade figures reveal the uphill struggle retailers face in 2024.
National Retail Association director, Rob Godwin, says while data reveals that retail turnover has stalled, population growth and increasing costs of doing business show retail growth has actually fallen in real terms.
“At face value the 1.1 per cent increase looks positive for a traditionally slow month but factoring in Australia’s accelerating population and disappointing December sales reveal retail growth has actually gone backwards,” he explains.
“Income from the festive season is usually the pot of gold at the end of a hard year for retailers, but poor sales have forced businesses to carry the cost of sales into January.”
While most states and territories recorded growth year-on-year, New South Wales saw a spending decline of 0.3 per cent.
Australian Retailers Association CEO, Paul Zahra, adds that January’s results were subdued as anticipated, likely a result of shoppers limiting their spending after Christmas and the first week of Boxing Day sales.
“The biggest discretionary categories, clothing, household goods and department stores, all suffered decline as Australians tightened their purse strings amid the cost-of-living crunch,” he says.
“Shoppers are continuing to feel the impact of the cost-of-living challenges and interest rate increases, making it a difficult time to be a discretionary retailer.
“Inflation is trending downward and retail spending has softened significantly, which we hope will encourage the RBA to pause interest rates again, with the aim to lower them at some point this year.”
