Australians spent a record $34.7 billion at stores in July, a sign that spending isn’t slowing down despite higher interest rates and spiking inflation.
Retail sales climbed 1.3 per cent last month, up $430 million, according to the Australian Bureau of Statistics, outpacing analysts estimates of a 0.3 per cent rise.
This marks a 16.5 per cent increase since January, and also reverses the gradual slowdown in spending growth that started in February.
Spending on households goods was the only category that saw a decline out of the six retail industries included in the release. Sales of household goods dropped 1.1 per cent.
“This shows that, despite cost-of-living pressures, households are continuing to spend,” ABS head of retail statistics Ben Dorber said.
Spending at department stores increased by 3.8 per cent in July, clothing spend was up by 3.3 per cent while cafes and restaurants saw spending rise by 1.8 per cent.
Another expected cash rate rise could see this spending slow down – the ABS data doesn’t show whether this rise in money through tills is simply a sign of inflation, rather than elevated shopping habits.
National Retail Association CEO Dominique Lamb said retail recovery remained “patchy”, despite these results.
“Even though we know price increases are contributing to some of the turnover growth, this show of resilience is likely to reinforce the RBA’s decision to continue increasing interest rates.
“With low unemployment and competitive wages and now strengthening consumer spending, it’s clear most Australians have been able to meet their financial obligations during this challenging period,” she said.
“However, some are struggling to meet ends. There are thousands of small businesses who are still doing it tough, even though some states and some sectors are thriving.”