Australian retail sales in October saw a 1.2 per cent year-on-year increase, reaching over $35.7 billion. Notably, the beauty and department store sectors showed resilience, with department stores experiencing a 0.4 per cent uptick and other retail categories, including recreational, sporting goods, and cosmetics, maintaining stable spending (up 0.3 per cent). In contrast, clothing, footwear, and accessories declined by 0.7 per cent, while household goods recorded a 4.6 per cent spending decrease, marking ten consecutive months of negative growth.

The surge in year-on-year sales was led by cafes, restaurants, and takeaway services (up 4.6 per cent) and food-related categories (up 3.3 per cent). Despite the positive overall results, Australian Retailers Association (ARA) CEO Paul Zahra noted the impact of a cost-of-living crisis on discretionary goods, emphasising the consistent spending on essentials like food.

“Spending on essentials remains consistent, while discretionary goods categories are clearly taking a hit,” Zahra said.“Food and takeaway again led the spending growth, and this is consistent with what we’ve seen all year – shoppers are prioritising the essentials in a cost-of-living crisis. While spending on takeaway remains positive with shoppers opting for value options such as quick service restaurants to ease pressure on their budgets. Shoppers are increasingly feeling the crunch of the cost-of-living crisis and interest rate increases, making it a challenging time to be a discretionary retailer.”

Zahra said retailers will be watching for November’s retail trade results with interest, given the prevalence of this year’s Black Friday sales. Zahra highlighted the challenging landscape for discretionary retailers amid the cost-of-living crisis and interest rate increases. The ARA anticipates potential impacts on retail sales following November’s interest rate hike by the Reserve Bank of Australia.

“October’s underwhelming results also came amid the Reserve Bank of Australia’s last interest rate pause,” he said. “We expect retail sales will be impacted even more by November’s interest rate hike. Black Friday has been forecast to be record-breaking this year, with shoppers desperate to cross off their Christmas wish-lists during the biggest pre-Christmas sale event of the year, which is likely to impact December’s numbers. Retailers and Australians will be anxiously awaiting the RBA decision next week, which will affect the final few weeks of Christmas spending. Whilst much has been said about the cost-of-living crisis, retailers are also experiencing a cost of doing business crisis and will be concentrating on offering the best service and value for budget conscious shoppers during the all-important Christmas trading period.”

Regionally, all states and territories exhibited year-on-year growth, with Western Australia leading at 3.5 per cent, followed by the ACT (3.2 per cent), Northern Territory (2.8 per cent), South Australia (2.8 per cent), Victoria (1 per cent), Queensland (0.7 per cent), Tasmania (0.7 per cent), and New South Wales (0.1 per cent).

Read the current issue of our digital magazine below:



Leave a comment

Your email address will not be published. Required fields are marked *