Retail sales have increased once again, now hitting another record level for the month of May, the Australian Bureau of Statistics has shared. But how long will it last?
The Australian retail turnover figures have increased by 0.9 percent in May, which is the fifth consecutive monthly rise.
“There was growth across five of the six retail industries in May as spending remained resilient,” said Ben Dorber, the Director of Quarterly Economy Wide Statistics. “Higher prices added to the growth in retail turnover in May. This was most evident in cafes, restaurants and takeaway food services and food retailing.”
It’s been a record-breaking month for retail, with $34.2 billion spent both in-stores and online. But as promising as this is, Paul Zahra, the CEO of the Australian Retailers Association. “It’s pleasing to see retail sales maintaining their strong trajectory – however, the figures aren’t necessarily a true reflection of how the sector is performing in an inflationary landscape,” he said.
Moreover, Zahra believes these figures may be ‘unsustainable’, and that the industry is unlikely to see ongoing retail spending figures as the cost of living continues to rise. “The high sales volumes can be partially attributed to the higher consumer prices we’re seeing across the economy, particularly in the food industries. Whilst sales are elevated, business costs are increasing enormously, in many areas at a far higher rate,” he said.
“A generation of homeowners are experiencing their first interest rate hikes, so there’ll be some natural belt-tightening. When people rein in spending, discretionary purchases are some of the first things they cut,” he continued.
This is a sentiment backed up by the National Retail Association, with CEO Dominique Lamb explaining that despite an increase in spending for necessary items such as food, department stores and household goods, there’s a decrease in personal items as they grapple with the state of the economy.
“The small businesses of the industry need to see more support from the government that promotes spending and the NRA will continue to advocate on this matter to our local and family-owned businesses back on track,” Lamb shared.
“Some will feel the pain from the recent rate hike more sharply than others, and some will struggle to pay the additional superannuation and minimum wage rise coming into effect at the end of this week,” she continued. “Decision-makers need to be aware that there are thousands of small businesses who are still doing it tough, even though some states and some sectors are thriving.”
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