Retail sales in Australia surged by over $1 billion, reaching $36.2 billion in June 2024, according to new data from the Australian Bureau of Statistics (ABS). This represents a notable increase from June 2023, highlighting a strong year-on-year growth.
‘Other retailing,’ which includes cosmetics, sports, and recreational goods, saw the strongest growth in June, rising 6.3% year-on-year. Department stores followed with a 4.2% increase. The staple category of food rose by 3.1%, while clothing, footwear, and accessories showed welcome growth at 2.2% after three consecutive months of decline. Household goods and cafes, restaurants, and takeaway services both saw modest increases of 1.1%.
Australian Retailers Association (ARA) CEO Paul Zahra attributed the uptick to strong mid-year and EOFY sales but cautioned that retailers still face significant challenges. “We saw many Australians embrace EOFY sales this year due to the ongoing cost-of-living crunch as a means of stretching their household budget,” he said.
“While retailers have enjoyed a slight uptick during June, growth remains modest, and challenges remain as retailers navigate high business costs and a slowdown in discretionary spending. There is no doubt shoppers are still feeling the pinch and are therefore being stricter with their spending habits. The RBA decisions for the remainder of this year will have a critical impact on consumer spending and the viability of vulnerable retailers and in particular small business.”
Zahra noted that spending on essentials such as food has remained stable, with a shift towards lower-priced, value-oriented products. He also highlighted the ongoing issues faced by retailers, including a retail crime wave, labour shortages, and supply chain pressures. “The ARA continues to call for targeted government support for vulnerable businesses. Retailers are also battling a retail crime wave, ongoing labour shortages, and continued supply chain pressures alongside the most intense changes to our workplace relations system in more than a decade.”
“Whilst June retail sales numbers are modestly pleasing, these results are predominantly driven by discounting which may impact profitability for many discretionary retailers, particularly small businesses,” Zahra concluded.
Ben Dorber, ABS head of retail statistics, noted that end-of-financial-year (EOFY) sales significantly boosted spending, particularly on discretionary items like furniture, electrical goods, and clothing. “Retailers told us that consumers continued to target sales events and look for the best deals before buying big-ticket items like furniture, bedding, TVs, and laptops,” Dorber said.
Despite the increase in spending, retail sales volumes fell by 0.3% in the June 2024 quarter, following a 0.4% drop in the March quarter and a 0.4% rise in the December quarter of 2023. “Retail sales volumes fell for the sixth time in the past seven quarters, reflecting that consumers continue to hold back on spending,” Dorber explained. “It also shows that much of the growth in monthly retail turnover reflects higher prices.”
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