Consumers spent $37.3 billion across the country in May, according to figures released by the Australian Bureau of Statistics (ABS).
Australian retail turnover rose 0.2%, following a flat result last month and growth of 0.2 per cent in March. Year on year, retail sales increased 3.3%.
“Retail spending rose in May driven mainly by a bounce-back in clothing purchases,” says ABS Head of Business Statistics.
“Retail spending was otherwise restrained …, with a drop in food-related spending and flat results across household goods.”
Food-related spending fell for the first time this year. Food retailing (down 0.4%) drove the fall, while spending in cafes, restaurants and takeaway food services was flat (0%).
Non-food related spending drove the rise in retail turnover.
Clothing, footwear and personal accessory retailing (up 2.9%) and department stores (up 2.6%) were the only industries to see rises, both bouncing back from large falls in April.
Other retailing had a fall (down 0.2%), while household goods retailing remained unchanged.
Year on year sales
There were year-on-year increases across all categories in May, with the other retailing category experiencing the most significant increase (up 4.78%), followed by cafes, restaurants, takeaway, which rose 3.83% over last year.
Spending increased at department stores (up 3.71%), clothing, footwear and accessories (up 3.5%), household goods (up 2.81%) and food (up 2.58%).
Australian Retailers Association CEO Chris Rodwell says while May results are encouraging, retail spending remains subdued.
“May growth is slightly lower than what we’ve seen in recent months, however performance continues to track modestly above 2024 growth levels. While inflation has metered back, with the CPI figure for May coming in at 2.1%, consumer confidence remains soft,” he says.
“It’s clear we remain far from a retail recovery. This means next week’s RBA decision on interest rates is pivotal. We are urging the RBA to cut the rate to bolster confidence and ignite a spending recovery in the second half of 2025.”
Battling higher business costs
Mr Rodwell acknowledges that sales results are only part of the story with retailers continuing to battle higher business costs across leasing, wages, energy, insurance and the supply chain.
“That’s why we’re focused on governments doing what they can to improve productivity outcomes and reduce the impacts of regulation and compliance burden. Retailers need to be free to run their business and compete with rising global competition,” he says.
“Retail recovery is intrinsic to our economic recovery. As a sector which employs one in 10 Australians, we want to shift gears to see retailers move out of survival mode into truly thriving and helping power our economy.”
