Australians are tightening their purse strings as the levels of inflation remain high and interest rates show no signs of easing.
According to the latest Mastercard SpendingPulse, which measures in-store and online retail sales across all forms of payment, overall retail sales increased 2.6 per cent year-on-year in April, a minor jump driven by food inflation, that falls well below the consumer price index of around 7 per cent.
Discretionary spending took a huge hit in April, with home furnishings down 17.5 per cent, electronics down 15.9 per cent, jewellery down 21.1 per cent, and apparel down 9.1 per cent.
“Most categories are recording significant declines now compared to 2022, with households across Australia saddled with mounting cost-of-living pressures and consecutive interest rate rises,” Australian Retailers Association CEO Paul Zahra says.
“We believe that April’s sales growth is predominately driven by price increases on food essentials which make up the lion’s share of retail spending.
“With discretionary purchasing slowing significantly, it will be a challenging environment for businesses – especially those on tighter margins.
“Retail businesses are simultaneously battling rising operating costs associated with increasing cost of debt, fuel, energy, labour, supply chains and rent.”
