Monthly household goods spending rose by 1.3 per cent in July 2024, following a 0.9 per cent fall in June, according to the latest CommBank Household Spending Insights (HSI) report.
Overall household spending across all categories, including services and food, was flat for the month, with CommBank citing discount-driven shoppers for the dismal result.
In the month of July, there was an increase in spending at online marketplaces, as well as discount and variety stores and cosmetics and beauty retailers.
On an annual basis, household goods spending slowed significantly for the month, down to 1.6 per cent in original terms following annual lift of 3.5 per cent recorded in the prior month of June 2024 compared to June 2023.
The annual result, according to CommBank, was driven by online marketplaces, discount department stores, discount and variety stores and beauty. This was offset by reduced spending on furniture stores, luxury boutiques, bathroom retailers, newsagencies and department stores.
The second-largest monthly boom in household spending were recorded in recreation, communications and digital, and insurance - all recording 0.9 per cent.
A busy sporting calendar supported recreation spending gains driven by ticketing services, sports grounds/facilities, and online travel bookings.
“There were several sporting events in July – such as the NRL State of Origin decider and the Wallabies rugby tests – that likely boosted recreational spending however this wasn’t enough to offset weakness across other categories of the index, as consumers continued to cut back,” CBA chief economist Stephen Halmarick said.
“We’re also seeing changes in shopping behaviours within categories, as consumers look for cheaper alternatives, like second-hand bargains and discount store sales.”
Meanwhile, the biggest monthly falls were recorded in hospitality (down 2.4 per cent), utilities (down 1.3 per cent) and food and beverage (down 1.2 per cent).
“Hospitality spending dropped in July and has been the weakest category over the past year, as consumers cut back on visiting cafes and bars,” Halmarick said.
The annual HSI growth rate increased to 4.5 per cent for the year, but with the biggest increases seen in essential services such as insurance (up 15.9 per cent) and health (up 13 per cent).
The disparity in spending remains across home ownership status, with spending by renters up just 0.3 per cent for the year to July compared to mortgage holders (up 3.3 per cent) and those who own their home outright (up 4 per cent).
“Spending by renters remains close to flat this year with significantly more cutbacks on discretionary spending compared to homeowners or those with a mortgage,” Halmarick said.
Halmarick added it was too early to tell how the Federal Government’s income tax cuts would impact household spending.
“As income tax cuts have only just taken effect, we will likely have a clearer picture of impacts on spending behaviour over the coming months,” he said. “More broadly, we expect that softer economic data, a further deceleration of inflation, and easing of monetary policy by overseas central banks will see the RBA begin to cut interest rates in the months ahead.”
The CommBank HSI index tracks month-on-month data at a macro level and is based on de-identified payments data from approximately 7 million CBA customers, comprising roughly 30 per cent of all Australian consumer transactions.