Retail sales continue to grow in 2023, reports the ARA Despite the cost of living crunch.
The ARA has reported retail sales have recorded 6.4 percent year-on-year growth in February 2023. This growth was bolstered by cafes, restaurants and takeaway, and food categories. According to data from the Australian Bureau of Statistics (ABS), shoppers spent more than $35 billion across the country in February.
There were significant year-on-year sales increases for cafes, restaurants and takeaway, up 17.1 percent, food was up 7.9 percent, department stores up 7.7 percent, and clothing, footwear and accessories up 6.2 percent. Other retailing spending increased by 3.2 percent while household goods declined year-on-year by 2.3 percent.
ARA CEO Paul Zahra commented on the data, saying sales growth in some essential categories like food is now close to neutral when inflation is taken into consideration however, other categories are performing well as people continue to enjoy their freedoms post pandemic.
“We’re certainly seeing the start of the spending slowdown as a result of the cost-of-living pinch gripping Australians, with household goods being the first discretionary category to continue to see a reduction in spend,” he said.
“Over the previous few months, spending growth has continued to gradually soften. We’re now at the point in essential categories like food where inflationary price increases are mostly driving retail spending growth.
“The categories to record strong spending growth were restaurants, cafes and takeaway, department stores and clothing, footwear and accessories – with the resurgence in getting out and about continuing to deliver solid results for this segment, which was heavily impacted previously by the pandemic,” said Mr Zahra.
Power retail data shows that February 2023 revenue is up slightly from the same time last year, having risen from $3.24B to $3.26B, but it still represents one of the lowest monthly totals in recent years.
CreditorWatch’s Chief Economist, Anneke Thompson commented on the report, stating, “February Retail Trade data indicates that Australian consumers are continuing to reduce their spending on discretionary goods. Spending on Household Goods was flat over the month of February, while spending on ‘Other Retail’ declined by 0.4 percent. However, spending in Department Stores rose by just one percent over the month, and clothing, footwear & personal accessories by 0.6 percent. Spending on food and at Cafes, restaurants and takeaway also rose marginally at 0.2 percent and 0.5 percent respectively.”
Thompson cautioned this growth is not here to stay. “While we are yet to see a marked downturn in spending at cafes and restaurants, the upcoming winter could tell a different story as more Australian borrowers come off fixed rate loans and many household budgets will see a dramatic fall in excess money available for eating out.”
The e-commerce landscape is changing. With a Power Retail Switched On membership, you get access to current e-commerce revenue and forecasting, traffic levels, average conversion rate, payment preferences and more!