Australian retail sales remained subdued in March 2024, with a modest increase of just 0.8% compared to the same month last year, despite being bolstered by an early Easter.
The latest data from the Australian Bureau of Statistics (ABS) revealed March’s retail spending totalled $35.6 billion nationwide.
Other retailing – including cosmetics, sports and recreational goods – saw the strongest growth in March (up 2.4%), followed by food (up 2.1%) and cafes, restaurants and takeaway (up 1.2%).
The discretionary retail categories of household goods (down 3.1%), clothing, footwear and accessories (down 0.4%) and department stores (down 0.3%) all recorded declines.
Most states and territories recorded overall growth year-on-year, led by Northern Territory (up 4.4%), Western Australia (up 2.5%), Queensland (up 2.2%), Tasmania (up 1.5%), South Australia and ACT (both up 1.2%).
However, our two largest states – Victoria recorded a subtle growth (up 0.8%) whilst New South Wales receded into decline (down 0.9%)
Australian Retailers Association (ARA) CEO Paul Zahra said retail spending in March remained subdued despite Easter celebrations, holiday spending and the additional 1 million Australians spending over the easter break compared to the previous year.
“In previous years Easter has occurred in April – this year we celebrated Easter at the end of March which helped prevent overall trading from falling into decline,” he said.
“Australians are still cutting back on spending as the lag effect of interest rate rises continues to take hold. While food spending remains constant, there has been a shift towards more affordable and value-oriented products in recent months.
“The discretionary categories are being hit the hardest, as seen with household goods, clothing and department stores this month despite mid-season sales commencing earlier because of an earlier Easter.
“The ongoing cost-of-living pressures and interest rate ramifications are making it a challenging period for those in the discretionary retail sector.
“Whilst we are hopeful of a rate cut in the near future, for retailers we anticipate the pressure of a slowdown in discretionary spend coupled with cost of doing business pressure, remaining in place for most of this year.
“More than 6 million Australians are paying mortgages, and this remains the biggest financial stressor for these households.
“Whilst interest rates remain elevated, discretionary spending will suffer.”
ENDS
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