The media is full headlines tracking rising inflation and interest rates. But Australian consumers are still spending up big.
Aussie retail sales rose for the third month in succession to $34.2 billion in May, reports the Australian Bureau of Statistics (ABS) – a hefty 10.4 per cent higher than the same month last year.
Paul Zahra, CEO of the Australian Retailers Association (ARA), sounds a cautionary note, though.
It’s pleasing to see retail sales maintaining a strong trajectory, he adds. “However, the figures aren’t necessarily a true reflection of how the sector is performing in an inflationary landscape. The high sales volumes can be partially attributed to the higher consumer prices we’re seeing across the economy, particularly in the food industries. It’s unlikely we’ll see retail spending maintain these levels as the rising cost of living begins to take hold on family budgets”.
Spending increased significantly in all the major sectors in May – Food Retailing (+6.2%), Clothing, Footwear and Accessories (+14.6%), Department Stores (+12.1%), Cafes, Restaurants and Takeaway Food (+16.2%) and Other Retailing, including beauty and personal care (+15.5%).
Victoria experienced the highest rise in monthly spending – up 12.3% – followed by Queensland (+10.6%), South Australia (+10.6%), NSW (+9.8%), WA (+9.7%), Tasmania (+5.7%), ACT (+5.1%) and the Northern Territory (+2.3%).
A major brake on retail sales in the future is the current labour shortage crisis, says the ABS. In May, there were 40,300 job vacancies in the retail trade – an increase of 38.5 per cent by contrast to the February figure of 11,200 vacancies.
The retail trade is currently experiencing the highest increase in job vacancies of any industry. A situation worsened by the absence or low penetration of overseas and student workers.
To deal with the shortfall, the ARA is lobbying for more support from the Federal and state governments and a review of employment income as part of the age pension to encourage the increased participation of older workers.
Retailers simply can’t get enough staff, be it in frontline roles or specialist positions in data and technology, which is severely impacting their ability to trade at their full potential, says Zahra.
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