Clothing, footwear and accessories retailing has copped a 0.2 per cent fall in revenue in May 2024 year-on-year, with department stores facing the harshest fall in spending of 1.7 per cent.
This is according to newly released data from the Australian Bureau of Statistics (ABS), which confirms that both retail categories recorded year-on-year declines for the third consecutive month.
However, clothing, footwear and personal accessory retailing had the largest rise in May month-on-month of 1.6 per cent, following two consecutive falls in April and March.
Clothing retailing in particular lifted by 1.6 per cent or $31.8 million month-on-month, with footwear and personal accessory retailing up by 1.7 per cent or $16.3 million.
Household goods retailing came in second month-on-month (up 1.1 per cent), followed by other retailing - which includes cosmetics, sports and recreational goods - (up 0.2 per cent). But department store sales fell by 0.9 per cent.
When it comes to retail spending overall, including food retailing, spending is up 1.7 per cent year-on-year and 0.6 per cent month on month.
ABS head of business statistics Robert Ewing said overall retail turnover was boosted in May by watchful shoppers taking advantage of early end-of-financial year promotions and sales events.
“Retail businesses continue to rely on discounting and sales events to stimulate discretionary spending, following restrained spending in recent months,” Ewing said.
“Despite the seasonally adjusted rise, underlying spending remains stagnant with retail turnover flat in trend terms. Compared to May 2023, trend is only up 1.5 per cent.
“Many retailers started end-of-financial year sales early, offering larger discounts than usual and noted that shoppers remain price-sensitive in response to persistent cost-of-living pressures.”
The key drivers in the spending lift year-on-year is driven by booms in food retailing and other retailing, both up 3 per cent, with a slight lift in household goods by 0.1 per cent.
Meanwhile, the overall month-on-month spending lift of 0.6 per cent followed a rise of 0.1 per cent in April 2024 and a 0.4 per cent fall in March.
Australian Retailers Association (ARA) chief industry affairs officer Fleur Brown said the continued decline of discretionary categories - particularly department stores and fashion - highlights the financial strain shoppers are feeling.
“Australians are doing it tough, facing an ongoing cost-of-living crunch and high interest rates,” Brown said. “It’s no surprise these pressures are reflected in May’s retail trends, and it is concerning for retail.
“While food spending remains constant as a staple, there has been a shift towards more affordable and value-oriented products in recent months.
“The discretionary categories are being hit the hardest, as seen with household goods, clothing and department stores.
“Other retailing is the only standout performer in May, and that’s typically because beauty products are the last category to be affected by economic downturns,” Brown said.
Brown added that the ongoing cost-of-living pressures, the elevated interest rate and increased cost of doing business make it a challenging period.
“The ARA continues to call for targeted government support for vulnerable businesses,” she said.
“Retailers are not only contending with slow consumer spending and higher costs of doing business – they are also battling a retail crime wave, ongoing labour shortages and continued supply chain pressures alongside the most intense changes to our workplace relations system in more than a decade.”