Retail sales continued to strengthen in July with trade increasing 17.9 per cent compared to the same month last year, according to the survey that measures in-store and online retail sales across all forms of payment.
Most retail categories recorded substantial year-on-year sales growth led by lodging (up 63.3 per cent), jewellery (up 47.6 per cent) and apparel (up 31.3 per cent).
However, Australian Retailers Association chief executive Paul Zahra cautioned that sales in discretionary retail categories are elevated in their comparisons to 12 months prior, when businesses in NSW and Victoria were severely restricted.
“In July last year, our two largest states were in lockdown and spending dried up as many non-essential retailers were forced to close their doors. It wasn’t until October that businesses in NSW and Victoria finally reopened, and consumers were able to shop in-stores once again,” Mr Zahra said.
“With travel restrictions in place a year ago, and tourism operators pushed to the brink, it’s no surprise to see Lodging leading the way, with sales up 63.3 per cent, as people get back to booking accommodation for work and holidays in Australia and abroad.
“The current retail trade environment is very different to a year ago and businesses are dealing with a whole new set of challenges due to inflation and rising costs associated with fuel, energy, supply chains and rents.
“What’s pleasing is that sales are currently holding up well despite the rising cost of living and interest rates, although it appears as though we haven’t seen the full impact of this hit consumers. The ARAs forecasts with Roy Morgan on Father’s Day gift spending are down 7.7 per cent compared to last year, with 42 per cent of consumers saying the current cost of living challenges will impact how much they’ll spend.
“The concern is with inflation yet to peak, consumers will start to be squeezed when it comes to their discretionary purchases.”
