Inventories across the retail industry have fallen by $644 million in the September 2024 quarter, following a rise of $531 million in the previous quarter, according to new data from the Australian Bureau of Statistics (ABS).
The latest fall is just behind mining - where inventories fell $668 million in the latest quarter - and ahead of manufacturing where inventories fell $350 million. This added to a total inventory fall across all industries in the September quarter, down $712 million. This followed a rise of $986 million in the June quarter, driven by retail and public authorities.
Mining inventories were rundown as exports exceeded production during the quarter, the ABS reported. Retail trade inventories were rundown as subdued household demand saw previously imported stocks not replenished, particularly in clothing, household items and motor vehicles.
A spokesperson for the ABS said the total fall in inventories was driven by a decrease in imports of consumer goods this quarter.
“Sales of consumer goods, including clothing, footwear and electrical goods also rose this quarter. Both factors led to the decrease in retail trade inventories.”
The Australian Retailers Association chief industry affairs officer Fleur Brown said the results show retailers responded to slowed consumer spending during the September quarter by reducing inventory levels.
“It’s undoubtedly been a challenging year for retailers, with ongoing cost of living challenges, rising business costs, increased inflation and a wave of retail crime contributing to tough economic headwinds,” Brown said.
“All eyes will be on peak season trading where many discretionary retailers make up to two-thirds of their profit. We are predicting a $69.7 million boost across the Christmas spending period, which represents a modest but welcome 2.7% increase over 2023 spending.”
The changes in inventories detracted 0.4 percentage points from GDP growth, as a drawdown in inventories followed a buildup in the June quarter, the ABS reported.
In the September quarter, the Australian economy rose 0.3 per cent in seasonally adjusted chain volume measures.
In nominal terms, GDP rose 0.4 per cent. This followed a 0.2 per cent GDP lift in the June quarter in seasonally adjusted terms.