Tuesday, June 18, 2024

Retail turnover declines in June

Australian retail turnover fell 0.8% in June 2023, according to figures released by the Australian Bureau of Statistics (ABS).

This follows a 0.8% increase in May 2023, and a 0.1% decline in April 2023.

ABS Head of Retail Statistics Ben Dorber says: “Retail turnover fell sharply in June due to weaker than usual spending on end of financial year sales. This comes as cost-of-living pressures continued to weigh on consumer spending.

“There was extra discounting and promotional activity in May, leading up to mid-year sales events. This delivered a boost in turnover for retailers, but that proved to be temporary as consumers pulled back on spending in June.”

There were falls across all non-food industries. Department stores (-5.0%) recorded the largest fall, followed by other retailing (-2.2%) and clothing, footwear and personal accessory retailing (-2.2%). Household goods retailing also fell (-0.1%), the eighth monthly fall in turnover over the past 12 months.

Food-related spending was mixed, with a fall in cafes, restaurants and takeaway food services (-0.3%) and a rise in food retailing (+0.1%).

“Over the last 12 months, growth in food-related spending has mostly been driven by rising food prices. We saw in Wednesday’s release of the Consumer Price Index (CPI) that food prices rose again in the June quarter. Consumers are responding to these price rises by changing to cheaper brands or by simply buying less.

“To see the full effect of consumer prices on recent retail turnover growth, it will be important to look at quarterly retail sales volumes which we release next week,” Mr Dorber said.

Retail turnover was mixed across the states and territories with the eastern mainland states all recording large falls.

June retail sales record 2.3% year-on-year growth

Retail sales in June have increased a modest 2.3% year-on-year – with food, cafes, restaurants, and takeaway spending growth again bolstering results.

According to figures released by the Australian Bureau of Statistics (ABS), shoppers spent more than $35.1 billion across the country in June.

The most significant year-on-year sales increases were food spending (up 5.8%) and cafes, restaurants, and takeaway (up 8.6%).

However, all other categories recorded negative sales growth compared to June 2022, with household goods again recording the biggest decline (down 4.4%), followed by department stores (down 2.1%), clothing, footwear and accessories (down 1.5%) and other retailing (down 1.1%).

All states and territories recorded growth year-on-year, led by ACT (up 6.2%) followed by South Australia (up 5.4%), Western Australia (up 5.4%), Northern Territory (up 4.5%), Victoria (up 2.4%), Tasmania (up 1.7%), New South Wales (up 1.5%) and Queensland (up 0.1%).

Australian Retailers Association (ARA) CEO Paul Zahra says sales growth for essentials like food masked an overall decline in retail spending.

“An increase of 2.3% year-on-year is a concerning result for the industry, considering the impact of price increases and with most categories now in sales declines,” Mr Zahra said.

“Food makes up more than a third of retail spending and its performance is being inflated by unavoidable price increases. Despite overall sales growth, the reality is that we’re very much in the grip of a discretionary spending slowdown.

“It has become a precarious environment for retailers, who are simultaneously feeling the pinch of this spending slowdown whilst also at the mercy of rising operating costs across the board.

“Shoppers have become far more spending-conscious due to the rising cost of living, and we’re seeing that reflected in these results.

“In last month’s retail trade data, clothing and apparel, department stores and other retailing were recording modest growth – we’re now seeing the lag effect on cost-of-living pressures come to fruition.”

 

CATEGORY

JUNE 2022 JUNE 2023 CHANGE
Food $13.247 billion $14.023 billion +5.8%
Household goods $6.026 billion $5.759 billion -4.4%
Clothing, footwear, accessories $2.946 billion $2.901 billion -1.5%
Department stores $1.843 billion $1.803 billion -2.1%
Cafes, restaurants, takeaway $4.911 billion $5.337 billion +8.6%
Other $5.427 billion $5.365 billion -1.1%
Total $34.402 billion $35.190 billion +2.3%

 

STATE JUNE 2022 JUNE 2023 CHANGE
New South Wales $10.835 billion $11.006 billion +1.5%
Victoria $8.821 billion $9.037 billion +2.4%
Queensland $7.169 billion $7.181 billion +0.1%
South Australia $2.169 billion $2.287 billion +5.4%
Western Australia $3.783 billion $3.989 billion +5.4%
Tasmania $688 million $700 million +1.7%
Northern Territory $308 million $322 million +4.5%
ACT $626 million $665 million +6.2%
Total $34.402 billion $35.190 billion +2.3%

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