July’s retail turnover is the largest rise in four months, according to the retail trade figures released by the Australian Bureau of Statistics (ABS).
Australian Retailers Association chief executive Paul Zahra said consumer spending remains strong despite cost-of-living challenges, but warned sales could soften in the months ahead as household budgets are placed under increased stress.
“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. Confidence remains low, but that hasn’t translated yet into reduced spending with retail sales continuing their record-breaking run,” Mr Zahra said.
“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.
“The figures should also be treated with caution in their comparisons to a year ago, as we’re now cycling the 2021 Delta lockdowns when businesses in NSW and Victoria were severely restricted. July sales for clothing, footwear and personal accessories, department stores and cafes and restaurants were up significantly compared to 12 months prior, highlighting the impacts on those businesses at this time last year when they had to close their physical stores.
“We also note that the high sales volumes can also be partially attributed to the higher consumer prices we’re seeing across the economy, particularly in the food industries.
“Father’s Day is coming up on Sunday and the ARAs forecasts with Roy Morgan show gift spending is 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.
“So while sales are strong for now, the concern is that consumers will start to be squeezed when it comes to their discretionary purchases in the run up to Christmas.”
Ben Dorber, head of retail statistics at the ABS, said after slowing growth in recent months, the 1.3 per cent rise in July was the largest since the 1.6 per cent rise in March 2022.
“Turnover rose in five of the six retail industries in July 2022. This shows that, despite cost-of-living pressures, households are continuing to spend,” Mr Dorber said.
Department stores had the largest rise, up 3.8 per cent, followed by clothing, footwear, and personal accessory retailing (3.3 per cent), cafes, restaurants, and takeaway food services (1.8 per cent), other retailing (1.6 per cent) and food retailing (1.2 per cent).
Household goods retailing fell for the third time in four months, down 1.1 per cent in July 2022.
Turnover rose in Victoria (1.8 per cent), the ACT (1.8 per cent), Western Australia (1.6 per cent), NSW (1.3 per cent), South Australia (1.2 per cent), the Northern Territory (0.7 per cent) and Queensland (0.4 per cent).
Tasmania was the only state where retail turnover fell, down 0.3 per cent. This was the state’s first fall in 2022.
