Australian retailers see slow spending amidst yearly growth

The country has a total retail spending of $36.475b.

Australian retailers reported sluggish discretionary spending in August, despite a 3.1% increase in overall consumer spending compared to the same month last year. 

The Australian Bureau of Statistics (ABS) reported total retail spending of $36.475b, up from $35.376b in August 2023.

Paul Zahra, CEO of the Australian Retailers Association (ARA), urged the Reserve Bank of Australia (RBA) to ease financial pressures on consumers ahead of the crucial holiday shopping season, which can account for up to two-thirds of many retailers' profits.

“Retailers employ thousands of people during the all-important Christmas trading period, providing jobs and boosting the Australian economy” Zahra said.

“Whilst there is great resilience within retail, we know there are many businesses in the sector that are doing it tough, especially small businesses,” he added.

The ABS data revealed that 'Other Retailing'—which includes cosmetics and sports goods—saw the highest growth at 6.5%. Food sales increased by 3.8%, whilst clothing, footwear, and accessories rose by 2.0%. Department stores and household goods saw modest gains of 2.1% and 1.4%, respectively. Cafes, restaurants, and takeaway services experienced a slight increase of 0.5%.

Zahra highlighted ongoing challenges, such as high interest rates and cost-of-living pressures, which are affecting consumer spending. 

“Priorities like food and other essentials are seeing modest growth, as is spending on small personal luxuries such as cosmetics, sports and recreational goods,” he said.

With spring approaching, many retailers are preparing for the holiday season, including Halloween, Black Friday, Cyber Monday, and Christmas. 

“This remains one of retail’s most difficult years – with a continued slowdown in discretionary spend, high business costs along with ongoing challenges such as retail crime, supply chain disruptions, and the most significant workplace relations reforms in decades.”