Retail sales across Australia have lifted by 2.3 per cent in September 2024 compared to the same month last year, subdued by a 0.2 per cent fall in department stores for the year.
This is according to new data from the Australian Bureau of Statistics (ABS), which also showed the department store category fell month-on-month by 0.5 per cent, dragging down monthly retail sales to a measly 0.1 per cent lift.
ABS head of business statistics Robert Ewing said after a boost last month from warmer-than-usual weather, retail spending held firm in September.
Clothing footwear and accessories had an annual sales lift of 0.8 per cent in September, with household goods nudging up by just 0.03 per cent.
Food led the charge with a $400 million boost to $14.495 billion, followed by a $200 million boost in other retailing to $5.74 billion.
Month-on-month, the largest rise was noted in household goods.
“The rise in household goods was led by Western Australian spending on hardware and gardening items after unseasonal rainfall last month reduced sales,” Ewing said.
Cafes, restaurants and takeaway food services (0.4 per cent) was the only other industry to rise this month.
Alongside a 0.5 per cent fall in department stores, clothing, footwear and personal accessory retailing food retailing both fell by 0.1 per cent.
For the monthly rise in fashion, clothing led the fall down by $6.6 million, while footwear and other personal accessory retailing rose by $3.1 million.
Both the Australian Retailers Association (ARA) and the National Retail Association (NRA) shared disappointment in the “sluggish” results, and have both called on the Reserve Bank of Australia to issue a rate cut in November ahead of peak season.
“The Christmas trade period is crucial every year to retail, but with the current cost-of-living crisis it will take on greater importance for the sector this year,” NRA interim CEO Lindsay Carroll said.
“The ABS figures reveal that spending in September was not disastrous, but it was well below the August turnover. Households are clearly still being extremely careful with how they spend money during the current economic environment.
“Just yesterday the ABS revealed that inflation had at long last dropped to within the prescribed range of the RBA. We think it therefore entirely justifiable that the RBA takes a serious look at a long-awaited cut to the official interest rate.”
Meanwhile, ARA CEO Paul Zahra said a rate cut would give confidence to the retail sector ahead of a season where many make up to two-thirds of their profits.
“Interest rates and cost-of-living pressures continue to impact Australians which is resulting in slowed consumer spending in most categories,” Zahra said.
“There is some buoyancy in the cosmetics, sports and recreational goods category which show us the ‘lipstick effect’ in action – with Australians continuing to spend on little personal luxuries versus larger purchases.
“Whilst there is great resilience within the industry, we know many retail businesses in the sector are doing it tough, especially small businesses.
“Retailers employ thousands of additional people during the all-important Christmas trading period, providing jobs and supporting the Australian economy.”
The ABS report also revealed mixed results across both the separate retail industries and each Australian state and territory.
Ewing from the ABS said the Northern Territory had the largest monthly fall in retail sales (0.7 per cent) as heavy unseasonal rain impacted spending. “It was the first monthly fall following four consecutive monthly rises,” he said.
The largest rise was noted in New South Wales, with a lift of 0.2 per cent.
“We acknowledge that September isn’t traditionally a busy month for retail as shoppers are mindful that the festive season is just around the corner,” Carroll said. “But many NRA members will be hoping for a stronger than usual festive period to help withstand the current challenging economic conditions.”
Zahra noted that many consumers have already commenced Christmas shopping to spread out purchases.
“We know this year, more people will be shopping even earlier, planning to complete their gift purchases at the legendary Black Friday and Cyber Monday period - which is why many retailers are eagerly anticipating the back end of next month,” he said.
“This remains one of retail’s most challenging years – with a continued slowdown in discretionary spend, high business costs along with ongoing challenges such as retail crime, supply chain disruptions, and the most significant workplace relations reforms in decades.”