Consumer spending stays strong in October

Australian retail sales continued to power through the pre-Christmas trading period with sales increasing 12.9% in October compared to the same time last year, with sales also up 28.2% on pre-pandemic levels according to the latest Mastercard SpendingPulse™, which measures in-store and online retail sales across all forms of payment.

All retail categories continued to record significant year on year sales growth as we cycle the lockdowns of 2021. Lodging once again recorded the biggest increase in October, up 60.3% compared to 12 months prior, followed up by Jewellery (up 41.1%), Apparel (up 40%), Electronics (up 30.5%) and Home Furnishings (up 21.5%).

Australian Retailers Association CEO Paul Zahra said the Mastercard SpendingPulse™ numbers reinforce ARA’s forecasts about the strength of the retail economy heading into the Christmas trading period.

“Retail performance this year continues to be outstanding, despite a dramatic drop in consumer confidence due to inflation. The Delta lockdowns of 2021 are a driving factor behind the substantial growth we’ve seen in the year-on-year comparisons along with price increases.

“It’s encouraging to see categories such as lodging and apparel bounce back from the dramatic setbacks of the pandemic with the continued strength in jewellery sales demonstrating the resilience of luxury retail,” Mr Zahra said.

“This strong sales momentum bodes well for the most important retail trading period – Christmas – which we are forecasting will continue to deliver growth. The ARA holiday sales predictions with Roy Morgan show Australians will spend nearly $64 billion in the lead up to Christmas, up 3% on last year.

“We recognise the impact of rising interest rates and inflation on households and we anticipate a lag effect on consumer spending, with a softening of sales likely to occur in 2023.

“Unfortunately, the biggest trading challenges for retail right now are crippling staff shortages and managing ongoing supply chain disruptions.

“We also acknowledge the challenge many small businesses continue to have as they contend with rising operating costs associated with fuel, energy, supply chains and rent,” Mr Zahra said. “The Christmas trading period is particularly important for these businesses as they replenish their cash reserves, in preparation for what is likely to be a challenging year ahead.”

 

Mastercard SpendingPulse October 2022 SECTORS (TOTAL SALES) NOMINAL SALES GROWTH
SECTOR October 2022 vs October 2021  (Year on Year) October 2022 vs October 2019

(3 years ago – pre-pandemic)

Apparel +40% +10.0%
Electronics +30.5% +22.7%
Fuel and Convenience +8.7% +3.8%
Groceries +7.4% +27.3%
Home Furnishings +21.5% +30.9%
Jewellery +41.1% +42.1%
Lodging +60.3% -7.8%
TOTAL AUSTRALIA RETAIL SALES +12.9% +28.2%

 

Mastercard SpendingPulse™ reports on national retail sales across all payment types in select markets around the world. The findings are based on aggregate sales activity in the Mastercard payments network, coupled with survey-based estimates for certain other payment forms, such as cash and check. As such, SpendingPulse™ insights do not in any way contain, reflect or relate to actual Mastercard operational or financial performance, or specific payment-card-issuer data.

 

Media Enquiries: 

M 0434 381 670

E media@retail.org.au

 

About us: The Australian Retailers Association (ARA) is the oldest, largest and most diverse national retail body, representing a $400 billion sector that employs 1.3 million Australians and is the largest private sector employer in the country. As Australia’s peak retail body, representing more than 120,000 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

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