Retail sales continued to strengthen in July with trade increasing 17.9% compared to the same month last year, according to Mastercard SpendingPulse.
Mastercard SpendingPulse measures in-store and online retail sales across all forms of payment.
According to its data analytics, most retail categories recorded substantial year-on-year sales growth, led by lodging (up 63.3%), jewellery (up 47.6%) and apparel (up 31.3%).
Overall, retail sales across the board continued to strengthen in July with trade increasing 17.9% compared to the same month last year.
Australian Retailers Association (ARA) CEO Paul Zahra cautioned that sales in discretionary retail categories are elevated in comparison to a year ago, when businesses in NSW and Victoria were severely restricted.
“In July last year, our two largest states were in lockdown and spending dried up as many non-essential retailers were forced to close their doors,” Zahra said.
“It wasn’t until October that businesses in NSW and Victoria finally reopened, and consumers were able to shop in-stores once again."
With Australia strictly locked down travel in 2021, Zahra said it’s no surprise that lodging is “leading the way” with sales up 63.3% as people gear back into local and international travel.
“The current retail trade environment is very different to a year ago and businesses are dealing with a whole new set of challenges due to inflation and rising costs associated with fuel, energy, supply chains and rents,” Zahra continued.
“What’s pleasing is that sales are currently holding up well despite the rising cost of living and interest rates, although it appears as though we haven’t seen the full impact of this hit consumers.
“The ARAs forecasts with Roy Morgan on Father’s Day gift spending are down 7.7% compared to last year, with 42% of consumers saying the current cost of living challenges will impact how much they’ll spend.
“The concern is with inflation yet to peak, consumers will start to be squeezed when it comes to their discretionary purchases.”
Other areas that saw increases in year-on-year sales included fuel and convenience (up 26%), electronics (up 22.6%), home furnishings (up 18.7%), and groceries (up just 4.5%).
The findings are based on aggregate sales activity in the Mastercard payments network, coupled with survey-based estimates for certain other payment forms, such as cash and check.
The Australian Retailers Association (ARA) is a national retail body, representing a $400 billion sector that employs 1.3 million Australians. It is the largest private sector employer in the country.