Retail Trade up Just 1% in January

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By Published On: March 4, 20240 Comments

ABS figures show retail growth in January, however a look at the bigger picture reveals a retail sales decline.

The ABS has reported that Australian retail sales increased just 1.1 percent year-on-year in January 2024, with cost-of-living pressures, impacting discretionary spend and forcing several categories into decline.

In January, Australians spent $35.7 billion on retail across the country in January.

Clothing, footwear and accessories declined 1.7 percent, and household goods similarly dropped 1.4 percent. 

The ‘other retailing’ category increased 2.8 percent, which encompasses recreational, sporting goods, and cosmetics. 

Aussies took advantage of the good weather on their summer time off with cafes, restaurants, and takeaway experiencing growth of 2.5 percent. 

Australian Retailers Association (ARA) CEO Paul Zahra said January’s results were subdued as anticipated, likely a result of shoppers limiting their spending after Christmas and the first week of Boxing Day sales.

“Shoppers are continuing to feel the impact of the cost-of-living challenges and interest rate increases, making it a difficult time to be a discretionary retailer,” he said.

Anneke Thompson, Chief Economist, CreditorWatch says that although the trade was up in January, the data indicates that there is no underlying growth in retail trade by Australian consumers.

“In good news for cafe and restaurant owners, there was a bounce back in spend in this category, with turnover increasing by 1.3 per cent month-on-month. However, in total turnover terms, Australians still spent less at cafes and restaurants than they did in September 2023. Similarly, overall retail turnover is only 0.2 per cent higher than it was in September on a seasonally adjusted basis. Australian consumers are clearly watching their spend and making adjustments due to high housing costs for the roughly 60 percent of Australians who rent or have a home loan.”

“CreditorWatch’s Business Risk Index (BRI) data for January 2024 supports these retail trade trends, with the average value of invoices of our B2B clients on a sustained fall since September 2023. Businesses are clearly feeling the impact of reduced consumer spending, even if they are not direct retail traders. It is unlikely we will see a decent recovery in turnover until we get closer to a drop in the cash rate. This is not likely to happen before Q3 2024.”

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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