Monday, June 17, 2024

Retail sales strengthen in February

Australian retail sales continued to strengthen in February, according to Mastercard SpendingPulse, despite the global economic uncertainty and cost pressures on business.

Sales in February increased 8.1% compared to the same time last year.

Sales also increased by 3% compared to the previous month and were up 14% on pre-pandemic conditions in 2020.

Household goods remain the top performing retail category. It recorded its seventh straight month of positive year on year (YOY) growth, with sales up 18.1%.

This was followed by clothing (up 12.2% YOY) and food retailing (up 5.4% YOY).

Department stores recorded its ninth straight month of negative YOY growth. Sales were down 3.7% in February compared to a year earlier (though up 3.9% since February 2020).

All the states and territories experienced positive sales growth in February. Victoria recorded the biggest increase, up 11.8% compared to the same month last year. They were followed by Western Australia (up 10% YOY) and Tasmania (up 9.3% YOY).

Australian Retailers Association (ARA) CEO Paul Zahra says consumer spending in Australia continues to be upbeat despite the challenging business conditions.

“Retailers have navigated the worst of the pandemic; however, we’ve now entered a period of global economic uncertainty, which has strained global energy supplies and is impacting cost of living pressures with rising inflation also a significant concern,” he says.

“There are other local issues at play with Covid-related supply chain issues and the devastating floods in NSW and Queensland also impacting business costs and the movement of goods, coupled with ongoing staff shortages.

“Despite the challenging business conditions, consumer spending continued to be upbeat during February and most retail sales categories of retail recorded positive year on year growth.”

CBD recovery

Mr Zahra notes that Australia’s CBDs are on the “slow road to recovery with an encouraging lift in the office occupancy rate in our capital cities in February, which is providing a much-needed boost to CBD retailers through increased foot traffic”.

Covid restrictions

Commenting on Covid restrictions, Mr Zahra says while there are minimal now in place in most parts of the country, the close contact isolation requirements are continuing to put staff out of action and cripple small businesses in particular.

“We continue to call for national alignment where close contacts don’t have to isolate, provided they’re showing no symptoms and testing negative,” he says. “This is an important step in our journey to living with Covid and treating it as any other virus – especially as our vaccination rates continue to be world-leading.”

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