Spending on clothing, footwear and accessories has plummeted by 2.5 per cent in April 2024 compared to April 2023 - the largest percentage fall in any retail category - according to new data from the Australian Bureau of Statistics (ABS).
The plummet in fashion was followed by 1.3 per cent falls in both household goods and department stores. Household goods fell by $79 million year-on-year, while department stores fell by $25 million.
This is all despite overall sales growing by 1.3 per cent in April 2024 compared to the same month last year. This lift was driven by food retailing, cafes and other retailing, which includes services such as hairdressing.
Other retailing recorded the largest lift year-on-year at 4.7 per cent, or $252 million.
In month-on-month terms, fashion retailing sales fell by 0.7 per cent, followed by a 0.5 per cent fall in food retailing - which includes supermarkets. Other retailing hit the highest growth at 1.6 per cent, with household goods up by 0.7 per cent.
Department stores remained flat month-on-month with a 0.1 per cent lift.
This monthly increase follows a 0.4 per cent fall in March 2024 and a 0.2 per cent rise in February 2024.
“Underlying retail spending continues to be weak with a small rise in turnover in April not enough to make up for a fall in March,” ABS head of retail statistics Ben Dorber said.
“Since the start of 2024, trend retail turnover has been flat as cautious consumers reduce their discretionary spending.
“The relatively earlier Easter and the different timing of school holidays across the country meant we saw some added volatility in turnover in March and April.”
“Looking across the past two months, we see weak underlying spending in most parts of the retail industry.”
Australian Retailers Association (ARA) CEO Paul Zahra said the continued decline of discretionary categories is a concerning indicator that a retail recession could be on the horizon.
“Other retailing is the only standout performer in April, and that’s typically because beauty products are the last category to be affected by economic downturns,” Zahra said.
“Whilst we had an earlier Easter than usual in 2024, spending across the two months has significantly softened across discretionary spending categories, with food and takeaway bolstering overall sales figures.
“Department stores, household goods and clothing, footwear and accessories remained in decline across both March and April, which is a worrying sign for retailers.
“Household goods have suffered significantly. The category recorded once-off sales growth in November during the Black Friday sales – but has otherwise remained in decline for more than 12 months.”
“The ongoing cost-of-living pressures, interest rate ramifications and increased cost of doing business make it a very challenging period for those in the discretionary retail sector, particularly for SMBs.”
Meanwhile, the National Retail Association interim CEO Lindsay Carroll said April retail trade had gone backwards in real terms, given that the 0.1 per cent increase to sales can be tied to inflated prices.
Carroll said the 0.7 and 0.5 per cent fall in clothing, footwear, and personal accessory retailing and food retailing, respectively, reveal “dire spending constraints” on households.
“Retailers were hoping for a shot of relief from the Federal Budget to float them through following months of low consumer spending, only to be underwhelmed by the provisions made for business owners,” Carroll said.
“The subsidised energy costs and instant asset write-off extensions, while all welcome, have failed to take into account the high cost environment businesses are currently operating in.
“ABS data also shows that consumers are waiting for cheaper deals, a move many retailers can't afford. This has led to reduced inventory, which creates a knock-on effect for suppliers.
“Policy makers need to consider the contribution of retail owners to the Australian economy and help create business environments that nurture investment and growth.”
All states and territories recorded overall growth year-on-year, led by Northern Territory (up 3.7 per cent), Tasmania (up 2.7 per cent), Queensland (up 2.2 per cent), South Australia (up 1.7 per cent), Western Australia (up 1.6 per cent), and ACT (up 0.9 per cent), with New South Wales and Victoria hitting modest growth of 0.8 per cent and 0.6 per cent respectively.
It was mixed in monthly terms, with Queensland, Victoria and the ACT experiencing trading falls of 0.2 per cent, 0.4 per cent and 0.3 per cent respectively.
Carroll said the upcoming Queensland State Budget gives the State’s policymakers the opportunity to support businesses that are doing it tough.
“We urge the Queensland State Government to address skyrocketing insurance premiums, reduce supply chain complexities and subsidise high transportation costs; taking excess pressure off Queensland businesses.”