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April Trade Data Reflects Unrelenting Pressure on Retailers

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By Published On: May 28, 20240 Comments

The Australian Bureau of Statistics (ABS) has revealed the underwhelming results of April’s retail spend.

Australian retail sales remained subdued in April 2024, totalling $35.7 billion, an increase of 1.3 percent year on year, and just 0.1 percent on March 2024.

This followed a 0.4 percent fall in March 2024 and a 0.2 percent rise in February 2024.

Ben Dorber, ABS head of retail statistics, said: “Underlying retail spending continues to be weak with a small rise in turnover in April not enough to make up for a fall in March.

“Since the start of 2024, trend retail turnover has been flat as cautious consumers reduce their discretionary spending.”

A reduction in discretionary spending has resulted in sales declines across a variety of categories including Household Goods entering its fifth consecutive month of sales decline (down 1.3 percent). Both recording declines for the second month in a row, the Clothing, Footwear, and Accessories category dropped down 2.5 percent in April, alongside the Department Store category which dropped 1.3 percent.

Fortunately, the “Other Retailing” category – including cosmetics, sports and recreational goods – saw a strong 4.7 percent growth, followed by the Food category, and Cafes, Restaurants and Takeaway category (up 1.9 percent).

Australian Retailers Association (ARA) CEO Paul Zahra said the continued decline of discretionary categories is a concerning indicator that a retail recession could be on the horizon.

“Other retailing is the only standout performer in April, and that’s typically because beauty products are the last category to be affected by economic downturns,” Mr Zahra said.

“Whilst we had an earlier Easter than usual in 2024, spending across the two months has significantly softened across discretionary spending categories, with food and takeaway bolstering overall sales figures. 

“The ongoing cost-of-living pressures, interest rate ramifications and increased cost of doing business make it a very challenging period for those in the discretionary retail sector, particularly for SMBs.”

The National Retail Association states that these April trade figures reveal unrelenting pressure on retailers. 

“Retailers were hoping for a shot of relief from the Federal Budget to float them through following months of low consumer spending, only to be underwhelmed by the provisions made for business owners,” said National Retail Association Interim CEO Lindsay Carrol.

“The subsidised energy costs and instant asset write-off extensions, while all welcome, have failed to take into account the high cost environment businesses are currently operating in.

“ABS data also shows that consumers are waiting for cheaper deals, a move many retailers can’t afford. This has led to reduced inventory, which creates a knock-on effect for suppliers.

“Policy makers need to consider the contribution of retail owners to the Australian economy and help create business environments that nurture investment and growth.”

About the Author: Rosalea Catterson

Rosalea is the Editor of Power Retail. With a keen interest in consumer behaviour and tech, she covers everything ecommerce and hosts the Power Retail Power Talks Podcast.

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