Retail turnover is up 1.3 percent for July, which is the largest increase in four months. Despite the ongoing cost of living struggles, this indicates signs of recovery and continued household spend.
There was $34.7 billion spent in July both online and in-store, which is a 16.5 percent increase from last year and a 1.3 percent from last month.
In spite of this household spend increasing from June, consumer confidence remains low – however, this doesn’t seem to reflect in spending behaviour. “It’s pleasing to see retail sales maintain their strength – this is an incredible result considering the inflationary pressures consumers are under at the moment,” said Paul Zahra, the CEO of the Australian Retailers Association.
“Confidence remains low, but that hasn’t translated yet into reduced spending with retail sales continuing their record-breaking run,” he continued. “However, the concern is that with inflation yet to peak and the full impact of increased mortgage repayments yet to flow through to household budgets, we may see sales soften in the months ahead.”
Looking at pre-COVID data, monthly changes indicate that the shopping behaviour is levelling out and remains stronger than in the lockdown era. However, there is a lot of ‘catch-up’ required, as Anneke Thompson, Chief Economist of CreditorWatch, explained.
“The monthly change in retail sales has settled down in the post-lockdown era when wild shopping trends turned the data on its head. However, smoother monthly changes in 2022 are currently well above the pre-Covid era,” said Thompson.
“In the years prior to COVID, the monthly change in Retail Trade averaged around 0.2 percent. A stark contrast to 2022 month-on-month changes, which have averaged 1.28 percent. A portion of this will be attributable to rising prices, but still, there appears to be a lot of ‘catch up’ spending underway by consumers, especially in the clothing, footwear and personal accessories and department store sectors.”
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