Sales across Australia’s retail market continue to trend upward in the lead-up to Christmas 2024, offset by slips in fashion, footwear and department stores.
This is according to new data from the Australian Bureau of Statistics (ABS) covering retail trade for October 2024.
Month-on-month, retail sales lifted by just 0.6 per cent to $36.7 billion in October. This followed a growth of 0.1 per cent in September 2024 and 0.7 per cent in August 2024.
The monthly sales lift is driven by household goods and other retailing (newsagents, beauty).
Despite the overall lift, clothing, footwear and personal accessory retailing fell by 0.6 per cent (or $18.1 million) to $3.01 billion. This was mostly driven by a $16.4 million drop in clothing and a $1.7 million fall in footwear and other personal accessories.
It is the second month in a row that fashion sales have fallen, dropping from a recent all-time peak of $3.036 billion in August. Despite this, fashion sales have been trending upwards since January this year, suggesting that November fashion sales may peak due to Black Friday/Cyber Monday sales.
Meanwhile, department store sales have fallen by 0.3 per cent in October, following a 0.4 per cent fall in the prior month. Department store sales have been relatively flat, wavering between $1.97 billion and $1.84 billion over the last year. However, the category is trending up, according to ABS data, with trend sales at $1.91 billion October, up from a low of $1.88 billion in March this year.
Year-on-year, fashion sales are up by 1.7 per cent, with department store sales up just 0.4 per cent.
“After a steady result last month, retailers told us that sales activity grew in October ahead of the Black Friday sales,” ABS head of business statistics Robert Ewing said.
“The stronger than usual October month saw some retailers enticing buyers to spend early with discounting, particularly on discretionary items.”
Ewing added that the rise in discretionary spending was driven by online discounting events, with notable lifts in other retailing and household goods year-on-year as well - up 8.4 per cent and 3.3 per cent respectively. He also noted that people spent more on electrical goods, particularly televisions and other audio-visual equipment.
Australian Retailers Association (ARA) chief industry affairs officer Fleur Brown said 2024 remains challenging for retailers, despite the “modest” overall yearly increase of 3.4 per cent.
“Increased costs of doing business, interest rates, retail crime, supply chain demands and more have continued alongside subdued consumer spending,” Brown said.
Brown then took aim at the Reserve Bank of Australia, calling for a cash rate cut on December 10 when the board meets for the final time this year. She said a cut will ease the pressure on businesses, particularly smaller businesses that operate on tighter margins.
“Retailers are now pulling out all the stops for peak season trading – the period where many discretionary retailers make up to two thirds of their annual profits.
“With record growth predicted for Black Friday and Cyber Monday sales, we’re hopeful of a better November to give confidence to retailers as they look towards the New Year.”
Brown also highlighted shifts in consumer habits, with some Australians using October to plan for the holiday season early by stocking up on gifts two months out from Christmas.
She added that there is noticeable buoyancy in the ‘other’ category, which includes cosmetics, sports and recreational goods, proving the ‘lipstick effect’ - when customers buy little luxuries and focus on health and wellbeing - is currently in action.