Friday, April 4, 2025

Food continues to drive spending

Consumers spent $37.1 billion across the country in February, according to figures released by the Australian Bureau of Statistics (ABS).

Australian retail turnover rose 0.2%, following a rise of 0.3% in January and a fall of 0.2% in December. Year on year, retail sales increased 3.6%.

“Retail spending in February remains steady, with mixed results across the industries,” says ABS Head of Business Statistics Robert Ewing.

“Like the January month, it was food-related spending which drove the rise in retail turnover [in February].”

Both food retailing (up 0.6%) and cafes, restaurants and takeaway food services (up 0.2%) rose for a second straight month.

Spending in the non-food industries was mixed. Other retailing (down 1%) fell having seen the largest rise in January (up 2.4%). Household goods retailing (down 0.3%) also dropped for a second straight month.

“Following promotion-based growth across the December quarter, spending on household goods continued to moderate with lower discretionary spending to begin the year,” says Mr Ewing.

This was partly offset by spending growth in department stores (up 1.5%) and clothing, footwear and personal accessory retailing (up 0.4%).

Retail turnover was up in most states and territories, led by Western Australia (up 0.8%), which had its seventh straight monthly rise, and NSW (up 0.5%).

Year on year sales

Other retailing experienced the most significant increase (up 5.5% year-on-year), followed by food, which rose 4.08% over last year. Spending increased at cafes (up 3.37%), department stores (up 3.23%) and in the household goods category (up 2.89%). There was marginal growth in clothing and accessories, which increased by only 0.4%.

Australian Retailers Association (ARA) Chief Industry Affairs Officer Fleur Brown says while retail spending remains steady, cost-of-living pressures and economic uncertainty continues to impact consumer behaviour.

“This is a solid result during a challenging economic period. While it is a disappointing result for clothing and accessories, with many retailers in that category under extreme pressure, it’s encouraging to see another month of steady growth across most spending categories,” she says.

“We know household budgets remain tight, and retailers are operating in a highly competitive and volatile environment with rising business costs. Any signs of stability in consumer spending are a welcome boost to business confidence, but we remain far from a retail recovery.

“We continue to call on the federal government to offer improved support measures for the sector, particularly small business, which is a key driver of the nation’s economy.”

The ARA and National Retail Association recently stated that getting the retail sector “back on its feet” must be a priority in the federal election.

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