Australians spent a whopping $35.1 billion in retail sales in September, with Xmas spending expected to be up 3 per cent on last year.

This is according to new figures released today by ABS, who note that September’s spend is up 17.9 per cent on the year prior, and up 0.6 per cent on August.

There were substantial year on year sales increases across all categories, led by clothing, footwear and personal accessories (up 70.4 per cent), cafés, restaurants and take away food (up 52.6 per cent) and department stores (up 53.6 per cent).

This marks the ninth consecutive month-on-month rise in retail sales.

“It’s fantastic to see the momentum maintained as we head into the all-important Christmas trading period – a time when many of our discretionary retailers make up to two-thirds of their profits.,” said Australian Retail Association CEO Paul Zahra.

“Despite the challenging economic times, retail spending remains extremely healthy and that’s great news for retail and a positive sign for our broader economy.

“Whilst there is a lot to celebrate, we are mindful of the impact that inflation and higher prices have on these sales results – with year-on-year comparisons also strongly influenced by the hangover of the Delta lockdowns last year.”

As Zahra notes, these rises are due to cycling the Delta lockdowns.

A less optimistic reading about these statistics would note that spending at department stores and on households goods both dropped from August to September.

Zahra notes that ARA expects a 3 per cent rise in Christmas spend on last year, with $64 billion expected to go through cash registers this holiday season.

“We are cautiously optimistic about the months ahead, and the ARA forecasts a 3 per cent year-on year increase in Christmas spending,” Zahra said.

“We also know that for many small businesses, the sales are critical in replenishing cash reserves from the pandemic period so these results are truly welcome.

“We are likely to see many Australians bring their spending forward this Christmas, as they aim to get in ahead of inflationary increases, avoid supply issues and secure their gifts well ahead of the Christmas rush.

“We could see a softening of sales as we enter 2023. There is likely to be a lag effect from
current inflationary conditions as we see the full impact of interest rate increases flow
through the economy, and inflation reaches its forecast peak.

“Overall trading conditions continue to be challenged by supply chain constraints and staff
shortages with vacancies continuing to be at record levels.”