Australian retail turnover has risen for the third straight month, increasing by 0.6% in October, according to figures released by the Australian Bureau of Statistics (ABS).
This comes after growth of 0.1% in September and 0.7% in August. Year on year, retail sales increased 3.4%.
“After a steady result [in September] retailers told us that sales activity grew in October ahead of the Black Friday sales,” says ABS Head of Business Statistics Robert Ewing.
“The stronger than usual October month saw some retailers enticing buyers to spend early with discounting, particularly on discretionary items.”
Mixed results
Turnover results were mixed across the industries.
Both food-related industries rose. Cafes, restaurants and takeaway food services (up 0.3%) had its third straight monthly rise, while food retailing (up 0.3%) bounced back, having seen a small fall in September.
“The bounce back in food retailing is being driven by liquor retailers,” says Mr Ewing. “[In October], liquor rose by 1.7%, which sees liquor turnover return to a similar level as July 2024.”
The non-food industries had significant rises for both other retailing (up 1.6%) and household goods retailing (up 1.4%).
“The rise in discretionary spending was driven by online discounting events while people also spent more on electrical goods, particularly televisions and other audio-visual equipment,” says Mr Ewing.
There were falls in clothing, footwear and personal accessory retailing (down 0.6%) and department stores (down 0.3%).
Year on year sales
Other retailing continued to see strong growth in October (up 8.4% year-on-year) along with household goods (up 3.3%) and the staple category of food (up 3%).
Cafes, restaurants and takeaway services showed marginal growth (up 2.3%), as did clothing, footwear and accessories (up 1.7%). Department stores recorded a slight increase (up 0.4%).
Australian Retailers Association Chief Industry Affairs Officer Fleur Brown says that while the modest increase was welcome, 2024 remains challenging for retailers.
“Increased costs of doing business, interest rates, retail crime, supply chain demands and more have continued alongside subdued consumer spending,” she says.
“We again call for cash-rate relief to ease the pressure on businesses, especially for small business who operate on tighter margins, as they continue to battle tough economic headwinds.
“In a trend that shows shifting consumer habits due to the cost-of-living crunch, some Australians used October to plan for the holiday season early by beginning to stock up on gifts and make their purchases earlier than last year to assist with budgets.
“There is noticeable buoyancy in the ‘other’ category, which includes cosmetics, sports and recreational goods, as shoppers prove the ‘lipstick effect’ in action as they continue to spend on little luxuries and focus on health and wellbeing.
“Retailers are now pulling out all the stops for peak season trading – the period where many discretionary retailers make up to two thirds of their annual profits.
“With record growth predicted for Black Friday and Cyber Monday sales, we’re hopeful of a better November to give confidence to retailers as they look towards the New Year.”