Australia’s retail sales up 3.4% in October

The strongest growth was seen in the “other retailing" category.

Retail sales in Australia grew by 3.4% in October compared to last year, according to the Australian Bureau of Statistics (ABS).

The strongest growth was seen in the “other retailing" category, which includes cosmetics, sports, and recreational goods, up 8.4%. Household goods rose 3.3%, and food sales increased 3%.

Cafes, restaurants, and takeaway services recorded a 2.3% rise, whilst clothing, footwear, and accessories were up 1.7%. Department stores edged up by just 0.4%.

Australian Retailers Association (ARA) Chief Industry Affairs Officer Fleur Brown said that despite the gains, retailers are under pressure from high operating costs, interest rates, and supply chain challenges.

“We again call for cash-rate relief to ease the pressure on businesses, especially for small business who operate on tighter margins, as they continue to battle tough economic headwinds,” she said.

Brown also noted a shift in consumer behaviour as Australians prepare for the holiday season amid a cost-of-living squeeze. “Some Australians used October to plan for the holiday season early by beginning to stock up on gifts and make their purchases earlier than last year to assist with budgets.”

Meanwhile, the “other retailing" category reflected resilience, with consumers investing in smaller indulgences such as cosmetics and wellness products, showcasing the so-called "lipstick  effect,” she said.

Moreover, Brown said that retailers are now preparing for Black Friday and Cyber Monday sales, hoping for strong November results to offset economic headwinds.

“Retailers are now pulling out all the stops for peak season trading – the period where many discretionary retailers make up to two thirds of their annual profits,” she said.