Australian retail sales saw a slight increase of 1.6% in February this year, compared to the same period in 2023, with cost-of-living pressures continuing to influence spending.
The Australian Bureau of Statistics (ABS) has released its latest data, which revealed February’s retail spending resulted in $35.8 billion nationwide.
The strongest growth was with clothing, footwear, and accessories (up 4.0%), then department stores (up 3.7%), cafes, restaurants, and takeaway (up 2.9%), and other retailing (up 2.7%).
Food trading rose 1.6%, whereas household goods fell 2.2%.
Most states recorded growth year on year, with the Northern Territory leading (up 3.5%), followed by Queensland (up 2.5%), then South Australia (up 2.4%), Tasmania (up 2.0%), Victoria (up 1.7%), Western Australia (up 1.5%), ACT (up 0.7%) and New South Wales (up 0.5%).
The Australian Retailers Association (ARA) CEO Paul Zahra said, while the pattern of low growth was concerning for retailers, the results for February were in line with expectations.
“Australians are still cutting back on spending as the lag effect of interest rate rises continues to take hold. While food spending remained constant, there has been a shift towards more affordable and value-oriented products in recent months.”
“The ongoing cost-of-living pressures and interest rate ramifications are making it a challenging period for those in the discretionary retail sector.”
“Any growth that has been achieved is mostly being fuelled by the Australian population increases of 2.5% across the past year. We also understand that significant events like Taylor Swift concerts can go some way to stimulate spending.”
He said higher cost pressures, including leasing, supply chain and energy costs, higher wages, and higher costs of goods and services continued.
The ARA welcomed the Reserve Bank of Australia’s decision to hold the cash rate in March, and is now hopeful it could cut rates by the middle of the year.
“With inflation decreasing and retail expenditures weakening, a mid-year interest rate cut would certainly alleviate the pressure on the retail industry and Australian households.”
