Australian retail sales were up 2.6% year on year (YoY) in April 2023 according to the latest Mastercard SpendingPulse, despite declines in most categories.
Jewellery reported the largest decline of 21.1% in spending, with apparel down 9.1%.
Other categories reporting declines included home furnishings (down 17.5%), electronics (down 15.9%), lodging (down 14.8%) and fuel and convenience (down 8.9%).
The total growth in April spending was driven by grocery (up 8.5%) and restaurants (up 8%) - the only categories to record growth in April 2023.
Australian Retailers Association CEO Paul Zahra said the results suggest the country’s cost-of-living crisis is now deterring retail spending.
“Most categories are recording significant declines now compared to 2022, with households across Australia saddled with mounting cost-of-living pressures and consecutive interest rate rises,” Zahra said.
“We believe that April’s sales growth is predominately driven by price increases on food essentials which make up the lion’s share of retail spending.
“Most retailers thrived last year, with low interest rates and high household savings leading to robust spending growth. It isn’t surprising to see these declines today when compared to a successful period in 2022.”
Zahra said with discretionary purchasing slowing significantly, it will be a challenging environment for businesses - “especially those on tighter margins.”
“Retail businesses are simultaneously battling rising operating costs associated with increasing cost of debt, fuel, energy, labour, supply chains and rent.”
Mastercard SpendingPulse measures in-store and online retail sales across all forms of payment.