Australian retail sales have set a new record for the third straight month with $34.2 billion spent in stores and online in May – a 10.4% increase on a year ago and up 0.9% on the previous month, according to figures released today by the Australian Bureau of Statistics.
Australian Retailers Association CEO Paul Zahra cautioned that while sales are strong, the growth is unlikely to be sustainable, and also reflects the higher consumer prices that are now flowing through the economy as inflationary pressures take hold.
“It’s pleasing to see retail sales maintaining their strong trajectory – however, the figures aren’t necessarily a true reflection of how the sector is performing in an inflationary landscape. The high sales volumes can be partially attributed to the higher consumer prices we’re seeing across the economy, particularly in the food industries. Whilst sales are elevated, business costs are increasing enormously, in many areas at a far higher rate,” Mr Zahra said.
“It’s unlikely we’ll see retail spending maintain these levels as the rising cost of living begins to take hold on family budgets. A generation of homeowners are experiencing their first interest rate hikes, so there’ll be some natural belt tightening. When people rein in spending, discretionary purchases are some of the first things they cut.
“Leasing costs are going up for many businesses, along with fuel and energy, while supply chains continue to be constrained. There’s been no let up to the disruption since Covid hit; things have only intensified since the war in Ukraine and many small businesses in particular are challenged right now.
“These challenges are running alongside the labour and skills shortages that continue to hamstring many in the industry. The majority of ARA members say the situation has gotten worse over the past three months, and without government intervention, the situation will only deteriorate.”
Retail category performance
|RETAIL CATEGORY|| YEAR ON YEAR SEASONALLY ADJUSTED RETAIL SALES GROWTH
(MAY 2022 v MAY 2021)
|Clothing, footwear and personal accessories||+14.6%|
|Cafés, restaurants and takeaway food||+16.2%|
State and territory performance
|STATE/TERRITORY||YEAR ON YEAR SEASONALLY ADJUSTED RETAIL SALES GROWTH
(MAY 2022 v MAY 2021)
|All states and territories||+10.4%|
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About us: The Australian Retailers Association (ARA) is the oldest, largest and most diverse national retail body, representing a $360bn sector which employs 1.3 million Australians and is the largest private sector employer in the country. As Australia’s peak retail body, representing more than 100,000 retail shop fronts and online stores, the ARA informs, advocates, educates, protects and unifies our independent, national and international retail community. To learn more about ARA’s exclusive member benefits and more, visit retail.org.au