Retail sales have surged by more than $1 billion from June 2023 to $36.2 billion in June 2024, new Australian Bureau of Statistics (ABS) data revealed.
The year-on-year boom in sales was led by a 6.3 per cent increase in spending for other retailing, which includes cosmetics, sports and recreational goods, followed by department stores (4.2 per cent), food (3.2 per cent) and clothing, footwear and accessories (2.2 per cent).
There were also lifts in spending on household goods and cafes, restaurants and takeaway services, both up 1.1 per cent respectively.
The 2.9 per cent lift in year-on-year retail sales for June follows a 1.7 per cent lift in May and a 1.3 per cent lift in April.
Despite the yearly uptick, month-on-month sales have plateaued with 0.5 per cent lift in June, following a 0.6 per cent lift in May and a 0.1 per cent lift in April.
Household goods retailing led the month-on-month increase by 1.1 per cent, followed by department stores and other retailing both on 1 per cent and fashion sales at 0.7 per cent.
ABS head of retail statistics Ben Dorber said end-of-financial year sales boosted spending in June by more than usual, particularly on discretionary items like furniture, electrical goods and clothing.
“Retailers told us that consumers continued to target sales events and look for the best deals before buying big-ticket items like furniture, bedding, TV’s and laptops,” Dorber said.
Despite the boost in spending, retail sales volumes have fallen by 0.3 per cent in the June 2024 quarter. This followed a drop of 0.4 per cent in the March quarter and a rise of 0.4 per cent in December quarter of 2023.
“Retail sales volumes fell for the sixth time in the past seven quarters, reflecting that consumers continue to hold back on spending,” Dorber said. “It also shows that much of the growth in monthly retail turnover reflects higher prices.”
Retail volumes on a per capita basis is down 0.9 per cent, and fell for an eighth straight quarter, down 3.0 per cent compared to this time last year.
Retail prices rose 0.9 per cent this quarter, up from a 0.7 per cent rise in the March quarter, based on data from the latest Consumer Price Index.
Australian Retailers Association (ARA) CEO Paul Zahra said that while strong mid-year/EOFY sales would have fuelled the slight uptick, retailers still have a challenging road ahead.
“We saw many Australians embrace EOFY sales this year due to the ongoing cost-of-living crunch as a means of stretching their household budget,” he said.
“While retailers have enjoyed a slight uptick during June, growth remains modest, and challenges remain as retailers navigate high business costs and a slowdown in discretionary spending.
“There is no doubt shoppers are still feeling the pinch and are therefore being stricter with their spending habits. The RBA decisions for the remainder of this year will have a critical impact on consumer spending and the viability of vulnerable retailers and in particular small business.
“Spending on essentials such as food has remained stable, and there has also been an ongoing shift towards lower priced, value-oriented products.
Zahra said the ARA continues to call for targeted government support for vulnerable businesses, noting that retailers 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.”
“Whilst June retail sales numbers are modestly pleasing, these results are predominately driven from discounting which may impact profitability for many discretionary retailers, particularly small businesses,” Zahra said.