Warm weather lifts retail spending in August

Consumers spent $36.5 billion nationwide in August, according to figures released by the Australian Bureau of Statistics (ABS).

Australian retail turnover rose 0.7%, following a rise of 0.1% in July and a rise of 0.5% in June. Year on year, retail sales increased 3.1%.

“Retail spending was boosted [in August] by warmer-than-usual weather for this time of year,” says ABS Head of Business Statistics Robert Ewing.

“This year was the warmest August on record since 1910, which saw more spending on items typically purchased in spring. This included summer clothing, liquor, outdoor dining, hardware, gardening items, camping goods and outdoor equipment.”

Turnover rose in most industries.

Of the non-food industries, department stores (1.6%) had the largest rise, followed by clothing, footwear and personal accessory retailing (1.5%) and other retailing (1.3%).

“The lift in turnover from the warmer weather was also boosted by higher discretionary spending as consumers took advantage of Father’s Day sales events during the month,” says Mr Ewing.

Household goods retailing (down 0.3%) was the only industry to fall, following heightened spending in recent months due to mid-year sales.

Both food-related industries rose, led by cafes, restaurants and takeaway food services (up 1%), followed by food retailing (up 0.6%).

“More people were out dining at cafes and restaurants enjoying the warm end to the winter months, which also boosted spending on alcohol consumed at home,” says Mr Ewing.

Year on year sales

Other retailing saw the strongest growth in August (up 6.5%) year on year along with the staple category of food (up 3.8%).

Clothing, footwear and accessories (up 2%), department stores (up 2.1%) and household goods (up 1.4%) all showed marginal growth. Cafes, restaurants and takeaway services rose slightly (up 0.5 %).

Looking ahead

Australian Retailers Association CEO Paul Zahra says that with difficult economic conditions persisting, retailers have their sights on the upcoming peak season period which includes Halloween, Black Friday and Cyber Monday, and the all-important Christmas trading period.

“Interest rates and cost-of-living pressures continue to impact Australians which is resulting in slowed consumer spending in most categories,” he says.

“Priorities like food and other essentials are seeing modest growth, as is spending on small personal luxuries such as cosmetics, sports and recreational goods.

“We typically see less spending during the colder months, which is why many retailers are shaking off the shackles of winter, embracing spring and gearing up for a hopeful festive season – with Christmas merchandise already in-store.

“This remains one of retail’s most difficult years – with a continued slowdown in discretionary spend, high business costs along with ongoing challenges such as retail crime, supply chain disruptions, and the most significant workplace relations reforms in decades.”