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Retail sales rise in January

Consumers spent $35.7 billion across the country in January, according to figures released by the Australian Bureau of Statistics (ABS).

Australian retail turnover rose 1.1%, following a fall of 2.1% in December and a rise of 1.5% in November. Year on year, retail sales increased 1.1%.

“The rebound in January follows a sharp fall in December when consumers pulled back on spending after taking advantage of Black Friday sales in November. Retail turnover is now back at a similar level to September 2023,” says ABS Head of Retail Statistics Ben Dorber.

“Retail turnover was unchanged in trend terms in January. This means there has been no growth in retail turnover when we look through the volatility of the past few months.

“Rather, spending patterns have shifted because of changes in seasonality around Black Friday as consumers took advantage of discounting in response to cost-of-living pressures.”

Turnover for cafes, restaurants and takeaway food services rose 1.3% following four consecutive monthly falls.

“Spending in cafes, restaurants and takeaway food services was boosted this month by large sporting events lifting turnover more than usual,” says Mr Dorber. “Bumper crowds for the Australian tennis summer and the Big Bash League boosted sales in catering services, which are part of this industry.”

Food retailing (down 0.1%) was the only industry to fall after having been the only one to see a rise last month.

Turnover rebounded in all the non-food industries following last month’s falls. Clothing, footwear and personal accessory retailing (up 2.4%) had the largest rise.

This was followed by household goods retailing (up 2.3%), department stores (up 1.7%), and other retailing (up 1.7%).

Year on year sales mixed

The highest year on year sales increase was in other retailing, including recreational, sporting goods and cosmetics (up 2.8%).

Cafes, restaurants, and takeaway (up 2.5%) and food (up 1.9%) also recorded growth.

Clothing, footwear and accessories (down 1.7%), household goods (down 1.4%) and department stores (down 1.3%) reported spending decline in January.

Australian Retailers Association CEO Paul Zahra says January’s results were subdued as anticipated, likely a result of shoppers limiting their spending after Christmas and the first week of Boxing Day sales.

“The two strongest performers, ‘other retailing’ and cafes, restaurants, and takeaway, would have been bolstered by people wanting to enjoy their summer outdoors,” he says.

“While spending on food remains stable, the category performance has reduced in recent months with shoppers increasingly opting for value brands and lower cost options where possible.

“The biggest discretionary categories, clothing, household goods and department stores, all suffered decline as Australians tightened their purse strings amid the cost-of-living crunch.

“Shoppers are continuing to feel the impact of the cost-of-living challenges and interest rate increases, making it a difficult time to be a discretionary retailer.”

Looking ahead

Mr Zahra says the Reserve Bank of Australia’s next monetary decision on 19 March will have significant bearing on the trading months ahead.

“Inflation is trending downward and retail spending has softened significantly, which we hope will encourage the RBA to pause interest rates again, with the aim to lower them at some point this year,” he says.

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