Despite audio CE and appliance retailers reporting a soft January the new year opened on a high with the latest data from Australian Bureau of Statistics revealing consumer spending grew 3.8%.

Despite this consumer electronics sales fell 8.2% leaving $190.7m black hole compared to January 2024.

Department stores rose 0.6% up $12.4m in January, in seasonally adjusted terms.

Earlier in the month (January) JB Hi Fi reported that sales in January were up 7.1%.

Total retail sales in January were $37.08 billion despite the fall in CE and appliance sales.

Cosmetics, sports, and recreational goods, saw the most significant increase (up 7% year-on-year), followed by clothing, footwear and accessories, which is up 4.5 % on the same time last year.

Australian Retailers Association (ARA) Chief Industry Affairs Officer Fleur Brown said whilst spending has naturally settled back following the festive season, January’s figures are a positive contrast to spending patterns throughout the majority of 2024.

“We are continuing to see a mixed performance across retail categories. Whilst some categories such as clothing and recreation were bolstered by back to school and holiday spending, January is traditionally a quieter month following the festive season and Boxing Day sales.

“Looking ahead, whilst these results are heartening, retail is far from out of the woods. Cost-of-living pressures remain acute, and it is likely to remain a challenging year for retail.

“The Reserve Bank of Australia’s April decision will be crucial in shaping consumer confidence and trading conditions. Whilst interest rate decisions tend to have a lag effect on consumer spending, we are cautiously optimistic we will see some improved trading conditions ahead.”

National Retail Association Interim CEO Lindsay Carroll said the data is a promising result for consumer sentiment, but business conditions remain tough.

“High rates of crime, the increased cost of doing business, the demand to stay competitive, and the lack of sufficient support from governments have created a counterproductive environment for retailers.

“Ahead of the federal election, we are calling on all sides of government to come in on a unity ticket to bolster Australian businesses.

“We urge governments to promote policies that encourage digital transformation in small to medium businesses. AI advancements and technology would help vulnerable businesses combat the growing tide of retail crime.

“Not all businesses have the time or resources to navigate complex regulatory environments. Governments need to cut red tape around compliance measures, especially for small business owners, so they can work on the business and not in the business.

“We are watching business insolvencies continue to rise despite the rate cut delivered by the Reserve Bank in February. Retailers need all sides of government prioritise these issues, so Australia’s second largest employer doesn’t fall through the cracks.”

According to a survey of retailers conducted by ChannelNews the bulk of CE and appliance retailers are concerned that the looming General Election could impact sales going forward.

The Reserve bank of Australia minutes from its first board meeting of 2025 when it cut the cash rate for the first time since 2020 to 4.1 per cent reveal that there is also no certainty of a further rate cut.

The minutes claim that “Having weighed up these alternative arguments, members decided that the case to lower the cash rate target at this meeting was, on balance, the stronger one. Members judged that the continued fall in underlying inflation, and at a somewhat faster pace than expected, meant that the upside risks to inflation had abated enough that they no longer needed the insurance they had taken out when raising the cash rate target in November 2023.

“Members tended to place more weight on the downside risks to the economy, and on the possibility identified by the staff that capacity in the labour market might be somewhat greater than embodied in the central projection. Given these judgements, members were particularly mindful of the risk of keeping monetary policy tight for too long, with adverse impacts on economic activity, the labour market and inflation.”