Retail spending in Australia reaches $24.04b in September

This is a 2.3% increase from the same month last year.

Australian retail spending reached $24.04b (AU$36.45b) in September, a 2.3% increase compared to the same month last year.

This growth occurs amid persistent financial pressures on consumers, according to the Australian Bureau of Statistics (ABS) as reported by the Australian Retailers Association (ARA).

Paul Zahra, CEO of ARA, welcomed the increase but cautioned that retailers continue to face significant economic challenges.

The ‘Other retailing’ category, which includes cosmetics and sports goods, saw the most substantial growth at 5.2%. The food sector also performed well, with spending rising by 3.1%. Cafes, restaurants, and takeaway services grew by 1.4%, while clothing, footwear, and accessories saw a slight increase of 0.8%. Household goods experienced a marginal rise of 0.03%, but department stores reported a decline of 0.2%.

Zahra urged the Reserve Bank of Australia to consider a cash rate cut in its upcoming meeting, arguing that this would enhance confidence in the retail sector as the critical Christmas shopping season approaches, a time when many discretionary retailers rely on significant profits.

Despite the positive growth figures, Zahra pointed out that rising interest rates and cost-of-living pressures are continuing to affect consumer spending.

He noted a trend toward small luxury purchases, often referred to as the ‘lipstick effect,’ where consumers prioritise affordable indulgences over larger expenses.

ARA said retailers are now preparing for the peak shopping season, with many consumers already beginning their Christmas shopping.

Moreover, Zahra noted the importance of major sales events like Black Friday and Cyber Monday for boosting holiday sales.