According to figures released today by the Australian Bureau of Statistics (ABS), retail sales recorded 4.2 per cent year-on-year growth in April.
While sales grew significantly for cafes, restaurants and takeaway (up 13.2 per cent), department stores (up 6.5 per cent), food (up 6.2 per cent) and clothing, footwear and accessories (up 4.9 per cent), other retail (books, sport and camping, cosmetics) spending increased by 0.2 per cent, but unfortunately household goods declined year-on-year by 4.9 per cent.
Australian Retailers Association (ARA) CEO, Paul Zahra, says whilst sales are slowing, several categories showed reasonable sales growth year-on-year, especially amid a cost-of-living crisis.
“Cost-of-living pressures are the greatest current concern for retailers and their customers and this continues to affect retail sales―a trend we expect to see continue in the coming months,” he says.
“Year-on-year spending on household goods continues to decline, but this also reflects the bumper trading in this category during the pandemic years.”
All states and territories recorded growth year-on-year and while the numbers are still positive, the slowdown in retail spending is certainly already in effect and when you factor in price increases these results are having an impact on margins.
“It’s good to see restaurants and cafes continue to do well, but we are mindful that price increases are also having an impact and will be putting pressure on margins.”
However, Aussie shoppers are tipped to spend $9.3 billion on mid-year/end of financial year (EOFY) sales―up $500 million from 2022.
Whilst shoppers will spend more per person than last year, less Australians overall are planning to splash out on the mid-year/EOFY sales in 2023 (5.8 million Australians, down 400,000 on 2022), with the 50–64-year-old demographic set to be the biggest shoppers.
“We’re in the midst of a cost-of-living crisis and this is certainly reflected by the fact that 400,000 fewer Australians will be opening their wallets in the mid-year/EOFY sales,” adds Zahra.
“Discretionary spending is certainly softening, but the reality is that those not significantly impacted by interest rate increases are looking for great deals and are prompted during the EOFY sales to purchase items for work or business that they can claim a tax deduction.”
